Report: lenders turn down Game Group bid
Game Group's chances of survival appear to have slimmed further after reports claimed lenders had turned down a private equity firm's rescue bid for the beleagured videogame retailer.
Last week OpCapita, a retail salvage specialist which recently bought ailing electronics retailer Comet for £2, offered to buy Game's debt from its lenders and settle accounts with suppliers, giving a glimmer of hope to the nation's largest specialist videogame retailer which had put itself up for sale in a bid to meet its quarterly rent bill and avoid slipping into administration.
Sadly, The Guardian reports that the bid was turned down by Game's lenders, which include the Royal Bank Of Scotland, Barclays, HSBC and Spanish bank La Caixa. While an RBS spokesperson said talks were ongoing, insider sources claimed no further discussions had taken place despite the looming rent deadline, which falls on March 25.
It leaves Game Group groaning under the weight of its debt and other commitments which The Sunday Times (via MCV) puts at more than £180 million. The rent bill totals £21 million, and the company owes £10 million in deferred VAT, £40 million to suppliers, faces a wage bill of £12 million, and owes its banks £100 million. The Guardian believes Game's bank debt is even bigger than that, with RBS owed £45 million and Barclays, HSBC and La Caixa each owed around £30 million.
Game's bid to raise cash to cover its rent bill has been hamstrung by its failure to stock a number of high-profile new releases after attempts to negotiate more favourable terms with suppliers met with failure. As a result it has been left without stock of new releases published by the likes of EA, Nintendo and Capcom, and it reportedly lost Microsoft and Activision late last week.
With just a week to raise £21 million to ensure landlords do not push it into administration, and lenders breathing down its neck, Game is now desperately in need of a buyer. With OpCapita's offer seemingly off the table, attention now turns to Walmart, which was last week linked with a move for the ailing retailer, and GameStop, the US chain which has been persistently linked with a takeover and has reportedly expressed an interest in Game's operations in Spain and Portugal.