Game confirms intention to float on London Stock Exchange

The retailer, which has been tipped to float for some months, plans to trade on the main market of the London Stock Exchange.

The games specialist insists it has “successfully completed a significant restructuring and implemented a number of initiatives designed to position the Group for  sustainable, long-term growth” under its news owners and management, appointed in April 2012.

Game was listed on the stock exchange when it collapsed into administration in March 2012 following a period of poor trading accompanied by a large and costly store base. Observers at the time in part blamed the sector’s cyclical nature. It was then acquired by investment firm OpCapita.

Game expects to receive net proceeds of approximately £12m from the issue of new Shares in the Offer, which it intends to invest in “general corporate purposes, including for additional working capital to support growth in the business following Admission”.

The IPO is expected to achieve a free float of at least 35%.

It is the latest of a growing list of retailers looking to launch IPOs this year.

Game, which has 33% share of the UK games market, now operates 560 stores across the UK and Spain compared with 874 in January 2012. The total video gaming market was worth an estimated £4.7bn across the UK and Spain combined in 2013, and Game said that is projected to grow to £5.8bn by 2016.

The retailer said it has “significantly expanded the use of customer insight and has invested in its CRM infrastructure and expertise”.

Game highlighted strengths including its database of over 19 million customers in the UK and Spain and its strong supplier relationships meaning it is “regularly provided with market-exclusive content”.

The retailer will also launch an all-employee Share Incentive Plan  and Save As You Earn scheme. All employees will be offered free shares up to a maximum of £3,600 under the SIP shortly after Admission, subject to an overall maximum of £1,000,000.

Game chief executive Martyn Gibbs said:  “Game has built a strong platform with the continued support of its store and central teams, its supplier partners and its customers. The business is now well set to capitalise on the growing market for gaming content, whether digital or physical, new or pre-owned.

“A public listing will support our long-term strategy as we develop our digital offering in all our channels. Game’s stores, online and mobile channels are an influential and cost-effective route to market for our supplier partners. Gamers can get advice, try new games, trade-in and buy exclusive content with us. With 16 million reward programme members, we are building a valuable community of gamers across the UK and Spain.

“We have had tremendous support from the industry since starting our new company and we now offer our customers significant benefits in terms of their store experience, access to our trained and knowledgeable store teams, access to digital content, and a widening range of products. As we enter a new era of gaming, with ever more content and ways to buy and play, the business is incredibly well-placed to continue to grow.”

Game non-executive chairman David Hamid said: “The turnaround of the Game business is remarkable.

“Game in the UK has been transformed and strengthened, while Game in Spain has proved its resilience. The Group now has exciting prospects for the future and I pay tribute to the colleagues within the business who have achieved this.

“We have a great team. The retail landscape is ever-changing and the business has proved it is capable of taking advantage of that pace of change. I look forward in particular to rolling out our ground breaking digital strategy, which should underpin the business for many years to come.”