Mike Ashley’s Sports Direct empire has taken a 26% stake in Game Digital, the troubled video games retailer has disclosed.
The announcement confirms an exclusive report by Sky News on the latest deal by Mr Ashley, the billionaire tycoon and Newcastle United owner.
Game said in a stock market announcement that it had been informed that Sports Direct had bought 44 million shares, or a 25.75% stake in the group.
It said: “Game is pleased that the strategic value of the group has been recognised by Sports Direct through this acquisition.
“The group looks forward to working collaboratively with Sports Direct to explore the clear opportunities that a constructive partnership and collaboration can deliver for all stakeholders in the gaming, live events and rapidly growing e-sports markets in which it operates.”
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Confirmation of the deal comes two weeks after Game Digital issued a profit warning that sent its share price plunging.
Mr Ashley, who owns a majority stake in Sports Direct, has expressed ambition to build a business empire fit to be dubbed “the Selfridges of sports retailing”.
He has previously orchestrated the acquisition of substantial stakes in Debenhams, French Connection and Findel, the home shopping retailer, through Sports Direct or personal investment vehicles.
The tycoon is thought to see opportunities in Game’s presence in the fast-growing e-sports market.
Mr Ashley has spent much of the past fortnight embroiled in a colourful court case centred on claims that he failed to honour a £15m payment to a former colleague.
Game’s shares closed nearly 23% higher on Wednesday amid speculation about higher-than-average trading activity. They added a further 11% on Thursday following the announcement.
The retailer trades from about 580 shops in the UK and Spain, and has sought to diversify into events, e-sports and other digital businesses as consumer trends shift shopping activity away from physical stores.
Sports Direct is thought to have acquired its stake in Game from City institutions including Invesco.