Sports Direct’s stake in Game Digital tops 84%
Mike Ashley’s retail empire is a step closer to snapping up the entire company.
Sports Direct’s £52 million takeover of retailer Game Digital moved a step closer to completion on Monday as Mike Ashley’s empire revealed it now controls nearly 84% of the entire business.
Bosses have also applied to have the Game shares delisted from the London Stock Exchange within 20 working days – no later than August 12 – and urged remaining shareholders to sell up.
Once Sports Direct owns more than 90% of the shares, it will be allowed to automatically buy the remaining stock.
In a message to remaining shareholders, Sports Direct said: “Game shareholders are urged to accept the offer, as the cancellation of trading and listing would significantly reduce the liquidity and marketability of any Game shares not acquired by Sports Direct.”
The 83.9% stake Sports Direct now has is made up of shares owned or agreed to be bought and follows Game bosses previously agreeing to the sale.
Sports Direct is offering 30p a share for Game under the cash bid, which was triggered after it upped its stake in the video games chain to 38.5%.
Game advised its shareholders on June 21 to accept the offer, saying that it represents a fair value for the group.
But Sports Direct has signalled there may be store closures and job losses following the deal amid plans to review Game’s operations and potentially merge some sites into its wider empire.
It marks Mr Ashley’s latest move to expand across the UK high street, having already snapped up department store chain House of Fraser, Evans Cycles and online player Sofa.com over the past year.
On Thursday, his company had been expected to update the stock market on latest trading but this has now been postponed due to complexities in integrating House of Fraser.
Sports Direct was already Game’s largest investor and has been a shareholder in the group since July 2017.
It has been working with Game to roll out concessions and its competitive gaming and eSports arenas, called Belong, in which Sports Direct has bought a 50% share of the intellectual property rights.
Sports Direct has previously said that, following the deal, it would look to open Belong sites within Sports Direct, House of Fraser or elsewhere in the group, “focusing on the customer experience and experiential retail offering”.