Directors of computer entertainment retailer Game have advised shareholders to accept a takeover offer from Mike Ashley’s Sports Direct that values the business at £51.9m.
They criticised Sports Direct for making its bid – on a mandatory basis after it reached the shareholding threshold that triggered an offer – with limited consultation but said it was nevertheless a fair deal.
Game said: “The board has been considering the merits of the mandatory offer and consulting with its major shareholders and advisers, whilst also actively engaging in normal course discussions with Sports Direct and its advisers during this time.
“Whilst the board is disappointed that Sports Direct decided to issue its offer document unilaterally whilst these discussions were ongoing, the board has unanimously concluded, following a period of detailed deliberation… that 30p per share represents a fair value for the group and intends, therefore, to recommend that shareholders accept the mandatory offer, as those members of the board who hold Game shares intend to do.”
The retailer said it took the decision after considering “the growing size of Sports Direct’s shareholding and the reliance Game has on Sports Direct for supporting its future growth prospects (especially the future rollout of Belong and Game venues under the collaboration agreement), combined with the ongoing industry headwinds, current negative retail market outlook and the likely elongated current console lifecycle which are expected to impact the future financial performance of the group”.