GameStop Confirms "Exploratory Discussions" After Buyout Rumors

After a report and ensuing speculation of a potential GameStop buyout, the retailer confirmed that [...]

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After a report and ensuing speculation of a potential GameStop buyout, the retailer confirmed that it is conducting "exploratory discussions" with third-party organizations.

A Reuters report shared on Monday indicated that sources familiar with GameStop's situation had knowledge of the potential buyout talks that were taking place. The report mentioned Sycamore Partners specifically as one firm that GameStop was talking to, a company with investments in retailers such as Talbots, Hot Topic, Staples, and Belk.

In a new press release shared to GameStop's news site on Tuesday, the gaming retailer confirmed that it was speaking with the third-party companies about a "potential transaction." Specific names such as Sycamore Partners weren't mentioned, and while avoiding the use of the term "buyout," GameStop's press release said that there's no guarantee that any business decision will come of the discussions with the third-party groups.

"GameStop Corp.(NYSE:GME), today confirmed it is in exploratory discussions with third parties regarding a potential transaction," GameStop's press release said. "There can be no assurance any agreement will result from these discussions. GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so."

The end of GameStop's message pretty much shuts down any hopes of receiving comments or further explanation on the subject, at least not until GameStop is ready to divulge more on what's happening. This stance is consistent with GameStop declining to provide Reuters with a comment during the initial report, at least at the time of publishing.

With GameStop's press release stressing the fact that there's no guarantee something will come of this, it remains to be seen if GameStop will follow through with potential buyouts or some other type of agreement. The first report came from sources familiar to the situation and wasn't an official release though, so more information may come from a similar source prior to GameStop's official announcement should anything happen.

Primarily a retailer for video games, GameStop has diversified its products in recent years to expand more into other options like gaming collectibles, trading cards, and non-gaming electronic devices like phones and tablets. Trade-in options were also expanded so that gamers could trade in their old electronics for some new games. Buying physical copies of used games is also a nice perk of GameStop, but the ease of access when it comes to downloading digital games instead of purchasing them physically has certainly put a dent in GameStop over the past few years.

More info on GameStop's business talks will likely be revealed through a future press release, if not sooner through unofficial announcements.

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