GameStop to Buy Rival for $1.44 Bln

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AlbertPacino

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GameStop Corp. the video game retailer, on Monday said it has agreed to buy competitor Electronics Boutique Holdings Corp. for $1.44 billion in cash and stock, helping GameStop enter new international markets.

Electronics Boutique shareholders 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 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 expects "meaningful" pretax savings, beginning in fiscal year 2006.

After the deal, GameStop said its Chairman and Chief Executive Richard Fontaine and Chief Operating Officer Daniel DeMatteo will keep those 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.

[RANK="www.gamestop.com"]www.gamestop.com[/RANK]

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