Stock exchange return for Game
Video gaming retailer Game has returned to London’s main stock exchange just two years after it collapsed into administration.
The company, which has 327 stores in the UK and 233 in Spain, began trading with a market value of £340m after shares were priced at 200p.
A 35% stake in the company – known as Game Digital – has been sold in the flotation, allowing shareholders to secure £101m and the company to book proceeds of £20m.
Hedge fund Elliott Advisors, which owned more than 90% of Game after backing a rescue deal led by private equity firm OpCapita, is retaining a significant stake in the business.
Game’s turnaround comes after administrators and its new owners shut around half of the outlets to scale back a costly store base which, coupled with heavy competition from online rivals, led to its demise.
It is now debt-free after reportedly owing creditors around £180m when it filed for administration in March 2012.
Under today’s flotation, which is short of initial expectations for a valuation of £400m, some 20,000 of Game’s most loyal customers in the UK will be handed virtual loyalty shares which track the value of the company’s stock. It has also established a share ownership plan for staff.
Chief executive Martyn Gibbs said the business had been able to attract high quality investors.
He added: “We are a truly specialist retailer, with a loyal customer base, operating in a growing market. Our supplier partners are producing increasingly advanced gaming content, for which we will continue to develop and facilitate new ways to buy and play. The business is well-placed for the future.”
Game’s market for new and pre-owned gaming products faces growing competition from online players such as Amazon.
But the company believes a focus on training staff and customer loyalty programmes, as well as leveraging on its brand heritage, has helped it adapt to the ever-changing retail landscape.
It claims to have around a third of the market for new video game content, hardware and accessories in both the UK and Spain.
The group also sees growing opportunity in the sale of pre-owned content. According to consultants OC&C, it had a 39% share of the pre-owned physical content market in 2013.
