GameStop to buy rival Electronics Boutique
Video game retailer has agreed to buy its rival for $1.44 billion in cash and stock.
The acquisition, announced Monday, is meant to help GameStop enter new international markets.
Shareholders of specialty chain store Electronics Boutique will receive $38.15 in cash and the equivalent of 0.78795 shares of GameStop Class A common stock for each Electronics Boutique share, the company said. That is a premium of 34.2 percent, based on Friday's closing prices for the stocks.
GameStop said it expects the deal to add significantly to its diluted earnings per share in the second half of its fiscal year 2005 and in 2006. It also expects "meaningful" pretax savings, beginning in fiscal year 2006.
Once the deal closes, GameStop Chairman and Chief Executive Richard Fontaine and Chief Operating Officer Daniel DeMatteo will retain their roles at the combined company.
Shareholders representing about 47 percent of Electronics Boutique's voting shares have already pledged their support for the deal, GameStop said.