Sports Direct buys large stake in struggling GAME
Retail billionaire Mike Ashley takes almost 26% in the retailer
Sports Direct, the retail giant owned by UK billionaire Mike Ashley, has acquired 44 million shares in GAME.
That's the equivalent of 25.75% of the share capital of the group.
It comes after GAME issued a profit warning at the end of the last month, stating that it would deliver profits 'substantially below previous expectations' due to numerous reasons, including the lack of Nintendo Switch stock.
The result saw GAME's share price plunge to below 20p, three years after it floated for almost 200p a share, even rising to over 350p. Following Sports Direct's move, the retailer's value is now at over 27.5p a share. The share price was rising all day yesterday amid speculation over significant trading activity, and GAME has confirmed the news in a statement this morning.
"GAME is aware that Sports Direct has taken significant strategic equity stakes in a number of retail and brand businesses across both the UK and USA, and is a leading retailer which partners with major global brands and suppliers," GAME wrote.
"GAME is pleased that the strategic value of the group has been recognised by Sports Direct through this acquisition of a 25.75% stake. The Group looks forward to working collaboratively with Sports Direct to explore the clear opportunities that a constructive partnership and collaboration can deliver for all stakeholders in the gaming, live events and rapidly growing esports markets in which it operates."
Sports Direct and Mike Ashley are already invested in a string of major retailers, including stakes in French Connection, Debenhams and Findel. Ashley is also actively invested in sports ventures and is the owner of Newcastle United Football Club.
However, Ashley cuts a controversial figure in retail. His Sports Direct business has been disciplined for failing to pay its staff correctly, withholding payments and for poor working conditions for its employees. In recent weeks Ashley has been in court following a dispute between himself and a former colleague who claimed that the retail entrepreneur promised to pay him £15m for raising Sports Direct's share price.