Activist investor Elliott Advisors has built a 99% stake in Game and is on course for a windfall if plans for a £300m float are successful.
It has emerged that the aggressive US hedge fund was the sole and unpublicised backer of investment firm OpCapita which bought Game out of administration in 2012. Elliott has loaned the business more than £100m, according to the Financial Times.
The news comes as Game, which achieved a sales surge over Christmas, examines whether it should join the queue of retailers seeking to float in 2014.
No decision has been made on whether Elliott will float its stake – which drops to about 90%, once management stock options are accounted for –but it is understood that the hedge fund wants to maintain a holding of between 50% and 70% of the retailer.
Elliott has become increasingly active in the UK retail sector in recent years. It has built a stake in struggling grocer Morrisons and is seeking to engineer a shake-up of its property portfolio.