UK sports retailer Sports Direct has made a £51.9 million ($66 million) offer to purchase Game Digital.
The company was forced to table a mandatory takeover bid after upping its stake in the video game retailer to 38.5 percent, and is offering to buy the remaining shares at a non-negotiable price of 30p each.
Sports Direct has been a shareholder in Game Digital since 2017, and was already the company’s largest stakeholder. The news is particularly notable given Game’s recent financial struggles, with the firm having reported a pre-tax loss of £7.4 million during the last fiscal year.
Bearing that in mind, Sports Direct claims the takeover will allow Game to accelerate its business plan, effectively pulling the company back from the brink of collapse. Specifically, Sports Direct intends to help Game “evolve” by expanding Belong, the company’s competitive gaming and esports division.
“The retail and gaming sectors are fast moving and currently subject to challenging conditions. Sports Direct does not believe that, as a standalone business, Game is able to weather the pressures that it is facing,” reads Sports Direct’s takeover offer.
“In addition to its general intention to secure the future of Game and navigate the challenging conditions Game faces by providing financial support […], Sports Direct intends to work with the Game management team to develop and review the company’s existing strategic programme of repositioning and right sizing Game’s retail business.”
As part of that planned review, Sports Direct has warned that some stores might be closed or consolidated, and that an unknown number of jobs could be on the line. The review is expected to take 12 months to complete, so staff won’t be affected by any changes for at least another year.