Prior to the agreement, the retailer’s board said it had been considering the merits of the mandatory offer and consulting with its major shareholders and advisers, whilst also actively engaging in normal course discussions with Sports Direct and its advisers during this time.
However, the board added it was “disappointed” that Sports Direct decided to issue its offer document unilaterally whilst these discussions were ongoing, but “unanimously” concluded that 30 pence per share represented a “fair value” for the group.
The board also believed that the offer has the potential to deliver a number of “strategic benefits” to Game’s business, including the opportunity to benefit from Sports Direct’s increased financial and operating support.
Sports Direct made a £51.9m offer for Game earlier this month, after it increased its stake from 20% to 38.5%. The sports fashion retailer acquired the shares from Marlborough UK Micro-Cap Growth Fund passing the 30% threshold requiring Ashley to make an offer for the shares he does not control under City rules.
In a statement to the London Stock Exchange Sports Direct said it was making a final offer of 30p-per-share to other stockholders – a premium of 27% based on Game’s closing price on Tuesday night of 23.55p.
Sports Direct said at the time: “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.
“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 whilst contributing to Game’s long term sustainability by escalating the evolution of the Belong business and accelerating the next stage of Game’s development.”
According to reports, the move comes as Sport Direct looks to integrate esports arenas within House of Fraser stores. Additionally, in February last year Game announced plans to open e-sports ‘gaming arenas’ and concessions within Sports Direct stores.
As part of the agreement Sports Direct acquired a 50% interest in the rights of Game’s Belong intellectual property, worth around £3.2m, in addition to a 50% profit share of future profits of Belong and associated venues.