Gamestop Seeks Funding For Merger

GamesIndustry.biz is reporting that the EB/Gamestop merger is pending a $950 million investment Gamestop is seeking to close the deal. From the article: "GameStop has announced the sale of USD 950 million in notes to investors, which the company will repay in six or seven years, with interest, in a move aimed at financing the firm's forthcoming merger with Electronics Boutique. The company has offered the sale of USD 650 million in Senior Notes priced at 98.688 percent with an 8 percent fixed rate of interest, and USD 300 million in full priced Senior Floating Rate Notes which will bear interest at the London Inter Bank Offering Rate of 3.875 percent."

Comments

Please, for the love of all competition, don't

[oldosadmin]

Seriously, around here (Raleigh) the only true "video game" stores are EB and Gamestop. It'd completely remove competition from this region.

Which would be sad, seeing as how Gamestop recently stopped (in my area) keeping older consoles, but EB still does -- I'd hate for a single bad decision to kill some other thing about the stores I like.

Re:Please, for the love of all competition, don't

[vertinox]

*sniffs*

I still miss the old "Babbage's" stores they used to have.

*sighs* Or maybe I just miss the time when games were on a 3.5" floppy standing when I would go down to the mall and watch the two TV screens outside the store showing games I couldn't afford at the time.

Re:Please, for the love of all competition, don't

[dalewj]

what competition? They still price at pretty much list price everything they sell except for junk and old games.

Its just to market leaders trying to combine to make all the money instead of just half for each. I dont see that affecting prices any (unless they now sell above list price).

Re:Please, for the love of all competition, don't

[FortKnox]

PC Game prices aren't going anywhere, and the console games have to compete with department stores (target, walmart, etc...) and Electronic stores (Best Buy, etc...). Competition will ensue.

Sleeper Merger

[superpulpsicle]

The merger is pointless. How many management folks will cash out of this one. They mind as well do something to the store name, how about "Stop Boutique".

Meanwhile I'll continue buying any new games at Bestbuy when the weekly flyers price new releases as $39.99. And if there is anything I can afford to wait, I'll settle for $19.99 anywhere.

Instant Money

[Gogo0]

If they can sell three or four of those Xbox2 bundles, they should be set.

Re:Instant Money

[PenguinCandidate]

They've already sold out.

Whew, Americans claim on the cliche "there's an idiot born every day" is still intact!

Huh?

[MBCook]

I was always under the impression that you had to have money to buy a company. I figured that things were like the stock market: No buying on margin. I'm surprised that they can do this.

I have no doubt they can pay. They are putting up 2/3rds of the cash and will be the only video game store around in most places (although obviously you'll still be able to buy from Best Buy, Circuit City, Toys 'R' Us, Target, Walmart, Meijers, and a million other places).

I'll stick with my local Game Stop thought. They didn't change when they went from being a Funcoland (which Game Stop bought), so I'm hoping things stay the same with EB. Does anyone know which name they are taking?

Re:Huh?

[dbhankins]

As far as I know, EBGames will be... assimilated ...into Gamestop.

I'm rooting for this note issuance to fail. I know it varies from area to area, but where I am the EBGames employees are knowledgeable gamers and the Gamestop folks less so. And EBGames trades in used PC games where Gamestop does not.

Re:Huh?

[ivan256]

They didn't change when they went from being a Funcoland

They didn't? Well then you must have had the shittiest Funcoland ever.

Funcoland was a no-frills game shop, where prices on used titles were updated weekly based strictly on supply and demand. The store stocked used stuff from every console generation. They either had what you wanted, or they didn't, and they could tell you right away.

Now they're all like GameStop. Obnoxious staff, limited tradeins to keep supply low and prices high, constant nagging to pre-order, stupid cardboard markups and advertising all over the place, and only current generation gear and games for sale.

The incentive from purchasing from GameStop or EBGames instead of buying online is rapidly aproaching zero. If Funcoland were still around, I'd still be broke.

Re:Huh?

[MBCook]

That's the only difference between the stores I'm really aware of. EB does computer games, Game Stop doesn't. I assume they will start (since they will already be in the market thanks to the acquisition).

The only other store like EB/GameStop I know of is Babbages (if they're still around). Software Etc. bit the dust a LONG time ago, and Funcoland was assimilated by Game Stop. I wonder if Babbages is next to be assimilated after EB.

Re:Huh?

[Anonymous Coward]

The only other store like EB/GameStop I know of is Babbages (if they're still around). Software Etc. bit the dust a LONG time ago, and Funcoland was assimilated by Game Stop. I wonder if Babbages is next to be assimilated after EB.

Software Etc. did not bite the dust a long time ago. In fact the Software Etc. at which I used to work just recently changed its name to Gamestop. Both Babbage's and Software Etc. are owned by Gamestop. They have been for a while. But Gamestop ssems to be trying to consolidate everything under one store name now.

Re:Huh?

[k_187]

babbages and software etc. were absorbed by Gamestop some time ago.

Re:Huh?

[Grave]

Limited trade-ins? GameStop's stores don't have trade-in limits. The web site does, but that is run as a seperate entity from the stores. The reason that this merger needs to happen is that the primary competition for GameStop/EB is Walmart. A company that represents 10% of the video game market has a tough time getting competetive pricing from manufacturers. On the other hand, a company with 20-25% of the market is much more able to get great deals. The reason that older systems aren't kept in most stores is because the supply is no longer there and is thus consolidated down to a handful of stores. If the demand for it existed enough that it would sell at a higher price, then perhaps GameStop would not have ceased trading in that product. But many of these stores are small and can only accomodate so many systems. And quite frankly, from a business standpoint there is no sense in keeping something in your store that has very little profit when you need the space for the rapidly growing library of titles for PS2, Xbox, and soon Xbox 360. GameStop is driven by the customer - if demand was truly there, then the stores would still carry those older systems. But the average gamer is someone whose first game system was a PS2.

I certainly wish it was still possible to walk into a GameStop and buy an NES, but I completely understand why it isn't any longer.

Re:Huh?

[transiit]

It's not that much of a surprise.

Funcoland was acquired back when Gamestop was still wholly owned by Barnes & Noble.

You know, the guys we're supposed to buy from because Amazon is evil?

-transiit

Re:Huh?

[ElleyKitten]

>>>They didn't change when they went from being a Funcoland

They didn't? Well then you must have had the shittiest Funcoland ever.


Funcoland kept the name long after they were bought by Gamestop. I'm assuming the grandparent poster was refering to a Gamestop Funcoland before and after they changed the sign, and in that case, he's correct, since nothing else changed with the sign.

Re:Huh?

[MBraynard]

Not only that, but you can use the acquired companies assets to secure a loan to pay for it. Part of the reason many companies don't keep a lot of cash laying around - someone might try to buy them using it - and then they retailiate by using that cash to buy their own stock to raise the price and prevent the acquasition.

I hate Gamestop's pricing tactics!

[Anonymous Coward]

I'm very unhappy about Gamestop being the aggressor here. A couple of years ago, the old mall near me used to have both a Gamestop and an Electronics Boutique. But then EB decided to move their business to a new building on the other side of the road, with the result that they closed down for a few months while they did the move.

The same day that the EB closed in the mall, the Gamestop raised it's prices - on every game in the store - by $5. So we'd drive 5 miles over to the next town to visit an EB to get decent prices. The EB eventually re-opened and the Gamestop lowered it's prices again. But by then, Gamestop had burned through any good will that gamers had towards them - they lost all their regular customers to EB. And once Gamestop closed, EB did not raise their prices even though they now had the local market to themselves.

So that's why I like EB, and why I hate Gamestop. And once EB is consumed by Gamestop, does anyone have any suggestions for alternatives to ebgames.com for buying games online?

sheesh

[humuhumunukunukuapu']

i don't think i've ever seen "London Interbank Offer Rate" written out anywhere other than a glossary.