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Australia Hampers Potential GAME Takeover

| 29 Feb 2012 21:48
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Videogame retail giant GameStop has cast a rapacious eye toward struggling U.K. retailer GAME but hasn't yet made a move because it doesn't want to be stuck with Australia.

Oh, Australia. Is there anything related to videogames that you can't screw up? It's hard to blame this particular situation on you directly, I suppose, but the truth is that your mere existence may soon lead thousands of people into the despair of unemployment. It seems that GameStop is very much interested in coming to the rescue of flagging U.K. retailer GAME, but is hesitant to do so because it doesn't want to end up with two feet in the Australian muck.

"It's widely known GameStop is looking at Europe," anonymous sources have told MCV, but the trouble is that GameStop already has a big presence in Australia thanks to the EB Games outlets it acquired in its 2005 merger with Electronics Boutique. Any deal for GAME would presumably include its Australian operations, which GameStop has no interest in.

GameStop does have the muscle to make a takeover happen, however. The company carries no debt and rang up over $3 billion in sales over the nine-week holiday period that ended on December 31. Say what you will about the death of retail, but GameStop still packs a serious punch, while GAME is cutting staff, closing stores and desperately trying to keep its head above water.

Speculation about GameStop's interest in GAME is also being fueled by its January decision to close its last remaining stores in Northern Ireland. The company said at the time that it intended to "serve the U.K. market with enhanced digital and online offerings" but the word on the street now is that the closures are actually a sign that it's spooling up for an acquisition.

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