Serial acquiror Mike Ashley of Sports Direct is in the buying Game again

Sports Direct has announced that it has acquired just over 25 per cent in high street electronic game retailer, Game Digital. Game Digital listed on the London Stock Exchange in June 2014 and has recently seen its share price drop quite significantly as a result of a profit warning the company issued after a shortage of the new Nintendo Switch game console hit sales.

Understanding the rationale behind this latest acquisition by Sports Direct is another matter, but Mike Ashley has made a habit of acquiring stakes in companies where on the face of it there are no obvious synergies.

Between 2002 and 2012 Sports Direct’s M&A activity was pretty much all about sports retailers and brands, so companies such as Umbro and Blacks Leisure were acquired. Since 2012 stakes have been purchased in companies such as Flannels, French Connection, Debenhams and Agent Provocateur to name but a few – granted, all are clothing retailers (of sorts!) for which you can see a logical link. Likewise with the acquisition of health clubs, such as some of the LA Fitness clubs; but Game Digital, whilst still a retailer, does seem to deviate from the normal pattern of clothing retailers.

Mike Ashley has proven himself to be an astute business man, so whether this acquisition has arisen because he believes Game is currently undervalued by the markets or whether he sees wider opportunities than simply capitalising on longer term share price gains, we will have to wait and see.

 

Filed under: video games, gaming, M&A, retail, deals