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.

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.

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?

[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?

[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.