The ailing GAME Group could receive something of a 1up in the form of a buyout, which should be announced tomorrow morning.
GAME Group, which consists of the GAME and Gamestation video game chains, is currently in administration. However, both The Telegraph and the BBC report that OpCapita will be taking over the firm, paying out just £1 to take an ownership stake in the company.
OpCapita is a consortium that famously bought out Comet last year for £2, a price which may at first seem shockingly low for a huge chain, but is balanced out by the millions of pounds in debt they will take on as a result of the buyout. The same goes for the prospective GAME Group buyout, from which it is estimated that OpCapita will acquire around £85 million in debt.
The consortium specialises in buying out struggling businesses and turning around their fortunes, as it is currently attempting to do with Comet.
The GAME Group owes around £85 million to various banks whom it has borrowed from, including RBS. The BBC’s Business Editor Robert Peston says that 6 banks, including RBS, have already approved the takeover bid from OpCapita.
The company has been in administration officially since last Monday, with administrators PwC brought in to clear things up. An immediate decision was made to close 277 stores, effectively leaving around 2000 people out of a job.
Should the deal be announced officially tomorrow, the security of the remaining 333 GAME and Gamestation stores, along with their respective employees, should be assured.
It had been rumoured that RBS would lead the charge on a buyout of the GAME Group late last week, but it appears that OpCapita’s plans were advanced and put into place earlier last week, thus securing them the deal.
The buyout has not yet been officially announced, though we expect this to happen tomorrow morning. It’s great news, and now we have to wait and see if the GAME and Gamestation brands can be restored to their former glory.
UPDATE: PwC, the adminstrators currently dealing with GAME Group, today confirmed the buyout as expected. Baker Acquisitions Limited, a group advised by OpCapita, today acquired the remaining assets of the Group, including the 333 GAME stores that are still open.
The buyout takes the GAME Group out of administration, and could save the jobs of almost 3200 employees.
“This means that the GAME brand will not be another one of the retail names disappearing from the high street in the current difficult climate.” PWC partner Mike Jervis stated this morning.
Via: The Telegraph