Updated: Sports Direct puts in offer to buy UK's GAME Digital for $66.1m, owns 38.49 per cent of retailer

Updated: Sports Direct puts in offer to buy UK's GAME Digital for $66.1m, owns 38.49 per cent of retailer

Update 2 - 6/6/19: Sports Direct now officially owns 38.49 per cent of GAME Digital. 

The firm's acquisition of 8.59 per cent of the UK High Street retailer's shares and voting rights went through at 11:07 on June 6th, 2019. Mike Ashley previously owned 29.90 per cent of GAME Digital, hanging just below the 30 per cent threshold at which point it has to make an offer to buy the company under UK law.

Sports Direct made such an offer yesterday (Wednesday, June 5th, 2019), with GAME saying it will reply in due course. 

More on this story as it develops. 

Update 1 - 5/6/19: UK High Street retail giant Sports Direct has made a final mandatory offer to buy GAME Digital as it looks to fly through the 30 per cent threshold on voting rights.  

The Mike Ashley-owned firm will soon own 38.49 per cent of GAME Digital's shares, pending its acquisition of stock from Marlborough UK Micro-Cap Growth Fund, which is set to go through on June 7th.

As a result, it has put in an offer of around £51.88m ($66.1m) or 30p per share - a 27.4 per cent premium on the company's 23.55p share price at market close yesterday (Tuesday, June 4th). 

Original story - 4/4/19: UK retail giant Sports Direct is on the verge of being compelled by law to make an offer to buy High Street chain GAME Digital.

As of March 22nd, the Mike Ashley-owned giant owns 29.89 per cent of voting rights at the interactive entertainment retailer. Under UK law, owning 30 per cent of a company's voting rights is the point at which a mandatory offer must be made to buy it.

Sports Direct first invested in GAME back in July 2017, snapping up a 25.75 per cent slice of the retailer. This grew to 27.9 per cent in mid-March of this year, before drawing closer to the 30 per cent red line towards the end of the month.

The firm has also bought 50 per cent of GAME's relatively new Belong brand for £3.2m ($4.2m) in February 2018, in addition to providing £55m ($72.5m) in capital for the retailer as part of an on-going collaboration

Since GAME went bust and came back in 2012, the firm has been trying to transition from being a pure retail play to having a more diverse and robust offering that doesn't rely just on consumers buying disks under the leadership of Martyn Gibbs (pictured, at the launch of its central London Wardour Street Belong store branch in December 2016

In an aggressive marketplace, with competition from both digital stores and fellow retailers like Amazon that can offer far more competitive prices, it looked like the company might struggle to transition in time. This support from Sports Direct has certainly made it more likely that it will pull the switch off. 

Indeed, without this backup, GAME likely could have gone the way of other UK retailers. Northern England indie chain Grainger and Scotland's Games Centre both went bust, while online outfit GameSeek also went out of business. Meanwhile, Toys R Us - a big supplier of games - went out of business, while The Hut Group-owned Zavvi has cut back supporting games. 

We've reached out to both GAME Digital and Sports Direct for comment. The former says it doesn't comment on shareholder activity, simply pointing us to the press release announcing the two companies' aforementioned relationship announced in  February 2018.

Sports Direct is yet to reply with comment.

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.