Quote:GameStop buying EB Games
Former retail rivals to merge in $1.44 billion deal; new company will be biggest game-store chain in America.
With the launch of the PSP, the unveiling of all three next-generation platforms, and the almost assured launch of the next-gen Xbox, 2005 was already shaping up to be a wild year for the games industry. Today, it got even wilder when the two top specialty game retailers in the US revealed they will soon become one.
At the beginning of the East Coast business day, GameStop Corp. and Electronics Boutique Holdings Corp., owner of EB Games, announced they had signed a "definitive merger agreement." In fact, the deal will see GameStop, which saw $1.84 billion in sales during its last fiscal year, buy Electronics Boutique, which sold $1.98 billion sales during its 2005 fiscal year.
A joint statement sent out by both companies outlined the deal, under which GameStop will pay $38.15 in cash and 0.78795 shares of GameStop common stock for each Electronics Boutique share. The cash-stock combination is worth $55.18, 34.2 percent over EB's $41.12 closing price on Friday. EB's stock rocketed skyward on the news and was up over $14.50 as of press time. GameStop stock also rose on the news, gaining more than $3.10 in value.
Upon its closing, the agreement will see the two companies merge operations under the GameStop banner, which will then fly over 3,200 stores in the US and 600 others in Europe and Australasia. However, to not disrupt plans for the 2005 holiday season, no changes will be made in either company's organization until 2006. Then, in mall locations where there is duplication in retail outlets, store closings will follow "when appropriate," according to a GameStop official.
Though technically a takeover, the GameStop-EB merger met with glowing approval from both parties. "This transaction makes a tremendous amount of sense from an operational, cultural, and synergistic perspective," said EB CEO Jeffrey Griffiths. "We will now be in an even better position to broaden our reach and generate further efficiencies for our business and our customers." Griffiths' role in the new company was not identified.
GameStop chairman and chief executive officer R. Richard Fontaine also had good things to say about the deal, which isn't surprising, as he will retain this top slot after the merger. "We are merging these two companies from a position of strength," he said in a statement. Fontaine also confirmed that one motivation was GameStop's desire to expand outside its traditional North American market. "This merger ... will enable us to enter new international markets and allow us to compete more effectively in the highly competitive US video game industry."
The new GameStop will be well suited to fight off competition from rivals like Wal-Mart and Blockbuster Video's Game Rush subchain. According to Reuters, the post-merger company will be the biggest game retailer in the US, controlling some 25 percent of the market.
http://www.gamespot.com/news/2005/04/18/...22418.html
Yeah, I heard about this earlier.
Well there's no EB in my town... so it can only be a good thing for me... maybe.
Quote:$38.15 in cash and 0.78795 shares of GameStop common stock for each Electronics Boutique share.
Too bad I didn't have any shares of EB stock.
The mall in Portland has both an EB and a Gamestop... I wonder if they'll both stay open. It'd really stink if one of them closed...
Probably depends on how much money each one is making.
Hopefully they make enough money to keep two open? :D ... I know, but cutting selection almost in half would be awful...
Well, let's see...the mall here has not one but two GameStops and an EB, and another EB is only about a 5 minute drive away.
That's a lot of videogames.
Quote:I know, but cutting selection almost in half would be awful...
Don't they have mostly the same stuff?
A Black Falcon Wrote:The mall in Portland has both an EB and a Gamestop... I wonder if they'll both stay open. It'd really stink if one of them closed...
From the news release it sounds like one of them will close. This really sucks since now there is only one major videogames-only retail chain. Less competition is not good. Pretty much every mall near me has an EB and a GameStop, and I would always stop by both when in the mall to see if one had a better deal than the other. I've really begun to hate the videogame industry lately.
Now's our chance to open our own multi-million dollar videogame store chain! Who's going to put up the first million? Ryan? lazy?
Same stuff? Some... but not that much really. First, EB has FAR more PC games. EB also has a huge selection of used PC games -- Gamestop, when it was Software ETC, had a huge selection of older PC games, but as Gamestop it got rid of them... so losing EB would be horrible on the PC front. Gamestop's selection is maybe half the size of EB's once the used games are taken into account. Okay, maybe 2/3rds... but definitely smaller. And when the two stores have different prices, it's usually been EB to be the cheaper one... Gamestop's one advantage is used N64 games, which it has far more of. Well, it's also got more used GB, GBC, and GBA games, but EB has decent selections of those too... Gamecube? Both have similarly small selections.
And anyway... EB has always been my favorite game store, and I'm sure I've bought more games there than anywhere else. It'll definitely be sad to lose it, even if the stores are just converted (some will close, but not all)...
Oh, damn. Well, there's only one GameStop in town to my knowledge, while there's at least three EB Games locations. Looks like they'll all be turning into GameStops now.
There's only one Gamestop around here soo...
Well, I guess I could still make online orders if I don't like GameStop's deals on certain items. Plus, there's Circuit City, Best Buy, Target, and Wal-Mart. (Though I try not to shop at Wal-Mart.)
Best Buy has a mediocre selection. I don't get much there... they don't have much that EB or Gamestop don't have, at least in my experience. Better than nothing, though, I guess...
Yeah, Best Buy wouldn't exactly be the first place I'd look. I'd probably look at GameStop first, then Circuit City. I'd probably be able to stop looking by then.
At Best Buy though you can use the gift cards to get a discount on games...