Who, if anyone, will buy GAME?

Christopher Dring
Who, if anyone, will buy GAME?

Leading financial and retail experts are all eyeing up a move for GAME Group. 

But as-of-yet only one has made a firm offer.

Some GAME rivals have even readied funds in preparation of a possible administration – with the firm’s 19.4m loyalty card database and GAME.co.uk domain amongst the targets.

But some suitors want to acquire the company in tact. 

Who is it?

OpCapita is a private investment firm, which made the headlines last year for buying troubled electronics retailer Comet for £2. It has built a reputation as a company that turns around ailing retailers.

Why is it interested?

It believes the games industry still needs a specialist retailer and is particularly attracted to its large, loyal customer base, plus its pre-owned business. It has identified online as a huge growth area.

What are the benefits?

The firm has no intention of immediately cutting staff and has got a management team ready. OpCapita has already turned around French furniture retailer BUT and Comet just posted its best month of sales for two years.

What’s the problem?

OpCapita has offered to buy GAME’s debt, but lenders have so far refused. A deal might mean a debt for equity swap which could result in shareholders missing out. OpCapita is also unafraid to make sweeping cuts having laid off 1,000 Comet staff.

Who is it?

Only one of the biggest retailers in the world. The US giant is already a big player in games and owns supermarket chain Asda. It has 8,500 stores worldwide and it generated $421.8bn in revenue last year.

Why is it interested?

It’s not entirely clear. Wal-Mart could be looking to grow its Asda store base to help it better compete with Tesco. 

What are the benefits?

Wal-Mart is a global powerhouse and any significant investment in the UK High Street will be a massive boost to the sector. Investor chatter has also suggested that 12p a share might be on offer, which will be good for shareholders.

What’s the problem?

Wal-Mart is unlikely to need two stores in every city, so expect some branches to be closed. Also, it’s not clear if Wal-Mart wants GAME or just the store base. A whole host of mini Asdas won’t be much use to the games industry.

Who is it?

The biggest games retail specialist in the world. No.1 in the US and other territories. It owns leading consumer magazine, Game Informer. It also owns download firm Impulse, social games portal Kongregate and streaming service Spawn Labs.

Why is it interested?

GameStop has a very small presence in the UK with its website and is currently lagging behind GAME in Spain and Portugal. This acquisition would make it the market leader in two major territories over night.

What are the benefits?

Store staff will be largely unaffected and the UK industry will still have a strong games specialist. In fact, with GameStop’s various digital and publishing business, it could be an even stronger presence than GAME.

What’s the problem?

Reports suggest GameStop doesn’t want GAME’s Aussie or French outlets (see story, right) as it already has a strong presence in these markets. A move by GameStop will likely only happen if GAME enters administration so it can pick parts of the business it wants.

Who is it?

Hilco is a retail restructuring firm, and has a history of helping retailers in distress – including Borders, HMV Canada, LittleWoods, Somerfield and Woolworths.

Why is it interested?

According to reports, Hilco believes GAME’s international outlets are profitable and that many of these territories still need a games specialist.

What are the benefits?

The company is filled with retail experts from the US and UK and is world renown for investing in the sector and offering advice to troubled outlets.

What’s the problem?

It only wants to purchase GAME’s international businesses – including Spain and Australia. It has no interest in acquiring the firm’s main UK arm.

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Tags: GAME , walmart , gamestop , buy , who , hilco , opcapita , bidders

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