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GAME Digital board pushes for Sports Direct sale

GAME Digital board pushes for Sports Direct sale

The board of directors at UK High Street retailer GAME Digital has advised its shareholders to accept the offer put forward for the company by Mike Ashley-owned Sports Direct.

In a response to the aforementioned offer, the firm says that its board - and advisors - have said that the 30p per share - representing a £51.88 ($61.1m) valuation for the company - is a good deal and that selling to Sports Direct will help GAME Digital transform from being purely a retailer with its new 'destination' Belong stores.

GAME's bosses say they do regret that they are unable to do this without any help.

"In coming to this recommendation, the Board has considered the growing size of Sports Direct's shareholding in the Group and the reliance GAME has on Sports Direct for supporting its future growth prospects (especially the future rollout of BELONG and GAME venues under the collaboration agreement), combined with the ongoing industry headwinds, current negative retail market outlook and the likely elongated current console lifecycle which are expected to impact the future financial performance of the Group," wrote CEO Martyn Gibbs (pictured) and co. 

"The Board acknowledges Sports Direct's intention to work with the GAME team as part of its ongoing review of the business and to accelerate the evolution of the BELONG business. GAME continues to see significant opportunity with its transformation strategy and rollout of BELONG. The Board is therefore disappointed that it is not able to execute this strategy on a standalone basis. Nevertheless, the Board believes that the Mandatory Offer has the potential to deliver a number of strategic benefits to GAME's business, including the opportunity to benefit from Sports Direct's increased financial and operating support."

Sports Direct bought a 25.75 per cent slice of GAME Digital back in July 2017, bringing his ownership up to 29.90 per cent in March of this year. That was before snapping up a massive number of shares, bringing its total ownership up to 38.49 per cent, meaning it had to place an offer on GAME Digital under UK law.


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Editor - PC Games Insider

Alex Calvin launched PCGamesInsider.biz in August 2017 and has been its editor since. Prior to this, he was deputy editor at UK based games trade paper MCV and content editor for marketing and events for London Games Festival 2017. His work has also appeared in Eurogamer, The Observer, Kotaku UK, Esquire UK and Develop.

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