Financial News

  • 15 January 2014, 9:36

Resurgent Game Pushes Button On 300m Float

Game Retail will this week emerge as one of the high street's festive winners when it cements plans for a 300m flotation less than two years after being bought out of administration.

Sky News has learnt that the chain, which is owned by private equity backers, is close to appointing HSBC, Canaccord Genuity and Liberum Securities to co-ordinate an initial public offering that will take place later this year.

The plans for a stock market listing cap a remarkable transformation for Game, which fell into administration in March 2012, resulting in the closure of nearly 300 stores.

It was acquired in April 2012 by a consortium of investors understood to have been led by the US-based fund Elliott Advisers and which included Henry Jackson, the controversial financier who faced criticism over the collapse of both Comet and MFI, the kitchens retailer.

Game will release a trading update on Wednesday which is understood to demonstrate the chain's recent resurgence, having shed many of its poorly-performing shops.

Analysts believe that Game enjoyed a positive Christmas after the November launch of gaming consoles including the Sony Playstation 4 and Microsoft's Xbox1. It was also buoyed by the unveiling last year of Grand Theft Auto 5, which quickly became the fastest-selling video game in history.

"The chain really outperformed the market, which should provide a solid platform for it to go public," a person close to the company said on Tuesday.

The trio of investment banks have not yet been formally hired but are expected to be in the coming days.

Game's most recent earnings figures disclosed that it made 15m in pre-tax profit in the 2012 financial year, a figure that analysts say may have more than doubled in the following 12 months.

Game is now run by Martyn Gibbs, a former HMV executive, who told The Times last month that the investors who backed the chain's buyout did not deserve much of the criticism levelled at them.

"There was a significant risk when the business was pulled out of administration. I think we get caught up in the percentages of a business that was being saved," he told the newspaper.

"But it wasn't a business that was guaranteed a future at that moment in time. So we are comfortable the business can work with those payments and continue to build the business."

Game is one of many retailers examining stock market listings as the UK economy continues its recovery, although the mixed fortunes of high street chains at Christmas suggests that executives will be cautious about going public.

DFS, House of Fraser, B&M Retail and Pets At Home are among those exploring flotations.

A spokesman for Game declined to comment.

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