Warning of store closures and job losses as Sport Direct make takeover bid for Game
PUBLISHED: 16:39 05 June 2019
Sports Direct has made a £51.9m bid for high street retailer Game.
However, Mike Ashley's firm has warned any takeover will likely lead to store closures and job losses as part of plans to restructure the chain.
Sports Direct is offering 30p a share for Game under the huge cash bid - which was triggered when it increased its stake in the video games chain to 38.5%.
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The bid is Mr Ashley's latest move to expand his UK high street empire - having already acquired House of Fraser, Evans Cycles and online player Sofa.com over the past year.
There are multiple Game stores across Suffolk, including Ipswich, Bury St Edmunds and Lowestoft.
And the potential takeover could place all these stores at risk.
Sports Direct was already Game's largest investor and has been a shareholder in the group since July 2017.
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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 said 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".
But it said its review of Game would cover its stores, headquarters and distribution centre.
It cautioned this could "result in consolidation or closure of Game sites and a consequent reduction or relocation in the employment of Game's employees and management".
Sports Direct said: "Sports Direct does not believe that, as a standalone business, Game is able to weather the pressures that it is facing.
"Sports Direct believes that the offer, in providing Game with the wider benefit of Sports Direct's operating and other experience and increased support, will secure Game's future and allow it to navigate these pressures."
Shares in Game jumped 24% after the bid.
Sports Direct added that the 30p a share bid was final and represented a 27% premium to Game's closing price on Tuesday of 23.55p.