GameStop entertaining buyout offers

Major gaming retailer GameStop confirmed today that it’s been entertaining buyout offers. Reuters originally reported that GameStop Corp. has received buyout interest from private equity firms and was actively discussing offers.

GameStop issued a press release confirming that it’s in “exploratory discussions” with third parties concerning a possible buyout, but the company cautioned that there’s no assurance that any final agreement would be reached.

extra-life_the_splintering_ad“GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so,” the company added.

According to Reuters, Sycamore Partners is one of the firms interested in acquiring GameStop, though Sycamore has declined to comment.

GameStop’s stock has taken quite a hit recently, dropping roughly 32 percent in the last 12 months. Shares of GameStop jumped as much as 11 percent on Monday as the buyout news began circulating, but it settled at a 9 percent increase later in the afternoon.

GameStop has weathered the advent of online retailers, streaming services, the emergence of digital marketplaces like PSN and Steam, and the sudden leadership shock of replacing CEO Michael Mauler after only three months in the position. Now it’s looking to avoid the same fate as Toys R Us while there is still an opportunity to do so.

Wii Party-GameStop-The Splintering

Would you pay $35 for a pre-owned Wii Party? Neither would anybody else.

GameStop’s business practices have been divisive among many gamers, with one side not particularly in favor of GameStop as a retailer and the other side hating them with a righteous fury. Among the concerns are selling new games as used to increase the price, offering low buyback prices on used games and the mismanagement of its retro gaming initiative. Trudging through their stores indicates some other oddities, too. Have you seen the pricing on preowned original Wii games?

Will a new overlord cure GameStop’s ills, or are they doomed to the same fate as Toys R Us, comic book stores, and other retailers who depend on sales of physical entertainment products? It seems that my daughter is quickly running out of places to buy Funko Pop! dolls. Is that a bad thing…?

Sources: Reuters, Ubergizmo

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