GAME lenders plotting purchase, reports claim
GAME is set to enter adminstration today, as the Royal Bank of Scotland is reportedly leading a plan to snap up the business.
The Royal Bank of Scotland, one of Game's lenders, is reportedly leading a group plan to buy the struggling videogame retailer once it enters administration, The Telegraph reports.
On Friday, Game Group, which also owns GameStation and employs nearly 6,000 people in the UK, suspended its shares from trading and announced it would be entering administration, with shops staying open in the short term.
It was hoped that Game would find a buyer over the weekend, but none has materialised so far. Now reports suggest that the company's own lenders could be preparing to snap up the ailing business.
Other rescue schemes are reportedly in the offing -- it's said that a pared-down version of the high street chain could be sold to GameStop, which is a US videogame retailer, or to OpCapita, the private equity house that bought Comet last year for just £2.
An offer made by OpCapita was apparently given the cold shoulder by RBS last week, however. The Telegraph states the "people familiar with the matter" are puzzled as to why the company's lenders shunned that deal, which would have stopped Game Group from falling into administration.
Another eventuality could see Game broken up, with individual shops flogged to the highest bidder. A restructuring company called Hilco is said to have its eye on some of Game's international assets.
Job losses seem likely as PricewaterhouseCoopers, the company handling Game's administration, is expected to announce the closure of shops that aren't making enough cash. It's no secret that Game has been struggling to make money in the face of online competition from the likes of Steam and Amazon.
Past reports peg Game Group as facing a £12m wage bill at the end of this month, with a new investor needing to stump up £100m.
Last week, MCV reported that the company's plan was to form a brand-new company that includes just Game's UK and Spanish chains, shutting down all GameStation shops except for a select few that are performing well. Game says it challenges "many of the claims" made in that article though.
Whatever happens, we should know Game's fate soon. In the meantime, let me know if you prefer to buy games online or in shops by posting in the comments below, or over on our Facebook wall.