Sports Direct boss buys up 26% stake in Game Digital
Mike Ashley's Sports Direct has picked up a 26% stake in struggling Game Digital as the tycoon continues to build up holdings in fellow retailers.
In a stock market announcement, Game said Sports Direct had hoovered up 44 million shares, adding that it looks forward to "working collaboratively" with the maverick billionaire's firm. "Game is pleased that the strategic value of the group has been recognised by Sports Direct through this acquisition of a 25.75% stake," a spokesman said.
"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 e-sports markets in which it operates." Last month Game issued a profit warning after bemoaning current challenging high street trading and the poor stock availability of Nintendo Switch.
The company had hoped the console would provide a major boost to sales after a difficult first half to the year.
Mr Ashley, who has recently been embroiled in a lurid court case with an investment banker, has a history of snapping up stakes in struggling high street firms.
The Newcastle United owner has stakes in Debenhams, French Connection and Findel.
"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 added.
Game shares rocketed over 11% to 27p following the news. Adam Tomlinson, analyst at Liberum, said: "We see a number of reasons how Game and Sports Direct can gain from a closer working relationship but it is surely the similar customer demographics that must be the key draw card here.
"The strategic play is not likely to have any concern with reference to the console cycle but rather growth in e-sports, Insomnia events and in-store gaming."