Pundits say that GAME will have to go into administration or become insolvent before acquirers step in.
The troubled UK retailer has already had a tough day, with shares hitting an all-time low as speculation about its future continuing to mount.
Now analysts reckon the worst will have to happen before any potential buyer enters the frame.
It's long been expected that GameStop for one is interested in parts of the GAME empire.
"We suspect that any potential suitor would prefer to wait for a formal administration process," Mark Photiades of Singer Capital Markets told the BBC.
"Through a pre-pack, the suitor would have much greater flexibility around store liabilities."
Similarly, FT.com quotes a retail analyst at Charles Stanley Securities offering the same view.
Peter Smedley told the financial paper: “Whilst there is a powerful industry rationale for GAME's survival in the UK – the key video games suppliers see GAME as a vital retail partner – some kind of insolvency process is looking increasingly likely to ensure that GAME is rescued, albeit in a radically different form.”
Smedley echoed the view that GameStop is the most likely to step in at that point.
He added: “Whilst other interested parties may well emerge during the mooted sales process, Gamestop is the best positioned financially and strategically to pick up the assets it wants".
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4 comments
It will have to go into administration there isn't anyone foolish enough to take it on as it is.
A deal is probably being hammered out as I write and an admin and partial buy out will probably happen simultaneously.
It’s never going to be the same company with the same employees and liabilities and not many suppliers will get paid. Landlords will be left holding properties employees will be left holding their payslips minus the cheques.
The rent quarter day is looming. If there is going to be a part rescue then it will be announced shortly otherwise expect it to seek protection from it creditors before the landlords place possession orders on the stock.
Derek Tidman INDUSTRY
0 1Mar 12th 2012 at 3:03PM
I work for GAME, I have to visit the MCV website everyday to find out if I still have a job. Because they sure as hell aren't keeping us directly updated.
John Mclain STUDENT
0 0Mar 13th 2012 at 7:46AM
We're doing all we can to keep you guys in the loop. Chin up - things might yet turn out OK Derek.
Ben Parfitt MCV STAFF
0 0Mar 13th 2012 at 8:59AM
Sorry Ben but Hope is not a Strategy !!!!
Derek
Derek Tidman INDUSTRY
0 0Mar 13th 2012 at 9:15AM