Game confirms funding talks
Game Group has confirmed that it has been approached by a third party, believed to be retail salvage specialist OpCapita, about helping the UK's largest specialist videogame retailer avoid administration.
Yesterday The Times reported that OpCapita – which bought another struggling UK chain, Comet, for £2 last month – had offered to buy Game's debt from its lenders. In a statement, the retailer confirmed that preliminary discussions had taken place – but warned that there was no guarantee of a reversal in its fortunes.
"The board of Game confirms that a third party has shown interest in providing additional funding for the company," reads a statement posted on the company's website. "The third party is seeking dialogue with the Group's current lenders, however there is no certainty to the outcome.
"At the same time, the board remains in its own discussions with its current lenders and continues to conduct a review of its business and assets.
"It is uncertain whether any of the solutions currently being explored by the board will be successful or result in any value being attributed to the shares of the company."
Game's share price rallied yesterday thanks to the OpCapita rumours, in addition to claims that US retail juggernaut Walmart had been in contact and investment group Blueshore Global Equity bought an eight per cent stake in the company. Speaking to MCV, Blueshore's Harsha Gowda said Game was a sound investment prospect despite its current woes.
"Game has a very viable long-term business model for the next five to 10 years," Gowda said. "It just needs to ride out the current downturn.
"Game has a huge number of assets. It even owns its Basingstoke HQ, which itself is extremely valuable. The market isn't considering these factors properly. Even if a bidder secured a purchase of the chain for a pound we still see the opportunity to make a sifnificant profit.
"Game stock is certainly worth far more than it's currently valued at."
Much remains to be done – particularly in Game's dealings with suppliers, with Microsoft, Activision and Sega the latest publishers whose new releases will no longer be on Game's shelves – but a rare day of good news had a positive effect on Game's share price. It ended yesterday up 68 per cent at 2.1p, and is up 71 per cent, to 3.59p, at the time of writing.