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GameStop/EB merger on schedule for October 31st

The merger between retail giants GameStop and Electronics Boutique looks set to complete as planned at the end of the month, thanks to funding from a successful investor offering.

The merger between US retail giants GameStop and Electronics Boutique looks set to complete as planned at the end of the month, with GameStop securing the required funding for the deal through a successful investor offering.

GameStop announced the sale of USD 300 million in Senior Floating Rate Notes and USD 650 million in Senior Notes on the 27th September, in a bid to raise the capital needed for its planned merger with Electronics Boutique. The investor offering was open for a limited period, with the guarantee that all notes would be redeemed should the merger fail to take place at the end of October.

The Senior Floating Notes will mature on October 1st 2011 and will bear interest at the London Inter Bank Offering Rate of 3.875 percent. Senior Notes will mature one year later, bearing interest at a fixed rate of eight percent.

GameStop has reiterated that the investment will be returned should the merger fail to take place for any reason at the end of October, stating: "The gross proceeds of the offering were placed into escrow and will be released to the issuers, less applicable discounts, in connection with the closing of the business combination. In the event the business combination does not close by 31st October, the notes will be redeemed."

Failing any unseen problems, the merger will result in the combined company owning approximately 25-30 percent of the videogame retail market in North America, as well as a sizeable base of stores in Europe, where it is expected to pursue an aggressive expansion strategy.

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Paul Loughrey

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