Report: GameStop In Takeover Talks With Private-Equity Buyers

GameStop Corp. GME spiked more than 9 percent Monday afternoon after Reuters reported sales talks with private-equity buyers.

Update: On Tuesday morning, GameStop confirmed it has held exploratory talks with third parties.

Why It’s Important

The board may be considering a buyout as part of a turnaround strategy, considering the stock’s been in steady decline for some time. Ahead of Monday’s report, it had waned 66 percent over the last five years, 38 percent over the last year and 30 percent year-to-date.

With interested parties including Sycamore Partners, GameStop could find itself a home with a parent well experienced in retail. Sycamore’s investment portfolio includes Coldwater Creek, CommerceHub, Hot Topic, Talbots and Staples.

What’s Next

GameStop has reportedly hired a financial adviser to aid in ongoing discussions. A sale is not guaranteed, though.

At time of publication, GameStop shares were trading up 7.8 percent at a rate of $15.05.

Related Links:

GameStop CEO Resigns, Co-Founder Daniel DeMatteo To Assume Interim Duties

2 Takes On GameStop's Better-Than-Anticipated Q3

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsRumorsM&AMoversMediaTrading IdeasReuters
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!