Jul 13, 2017

Sports Direct buys 26% stake in Game Digital

Game Digital has become the latest ailing retailer to see Mike Ashley's Sports Direct appear on its shareholder register, taking a 26 per cent stake following a profit warning two weeks ago. Game said on Thursday it had been informed by Sports Direct of its acquisition, which would have cost about £11m based on its closing share price on Wednesday. Mr Ashley, the majority owner of Sports Direct, appears to have taken advantage of weakness in the Game share price after a profit warning at the end of last month. Sanjay Vidyarthi, analyst at Canaccord Genuity, said there "Could be some scope" for Game concessions in larger Sports Direct stores and that collaborations around football video games would "Make sense". Liberum, which is house broker to both Sports Direct and Game, said "It is surely the similar customer demographics that must be the key draw card here", and said it was esports, events and in-store gaming that were attractive rather than console sales.

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