Game Digital : Response to mandatory cash offer by Sports Direct

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE.

21 June 2019

GAME DIGITAL PLC('GAME' or the 'Group')

RESPONSE TO MANDATORY CASH OFFER BY SPORTS DIRECT INTERNATIONAL PLC

Further to the announcement by Sports Direct International plc ('Sports Direct') on 5 June 2019 of a mandatory cash offer for the Group, and the publication of its formal offer document on 20 June 2019, at a price of 30 pence per GAME ordinary share of £0.01 (the 'Mandatory Offer'), the board of directors of GAME (the 'Board') today announces its response to the Mandatory Offer.

The Board has been considering the merits of the Mandatory Offer and consulting with its major shareholders and advisers, whilst also actively engaging in normal course discussions with Sports Direct and its advisers during this time. Whilst the Board is disappointed that Sports Direct decided to issue its offer document unilaterally whilst these discussions were ongoing, the Board has unanimously concluded, following a period of detailed deliberation and having been so advised by Canaccord Genuity Limited ('Canaccord Genuity'), that 30 pence per share represents a fair value for the Group and intends, therefore, to recommend that shareholders accept the Mandatory Offer, as those members of the Board who hold GAME shares intend to do. In providing its advice, Canaccord Genuity has taken into account the commercial assessments of the directors of GAME.

In coming to this recommendation, the Board has considered the growing size of Sports Direct's shareholding in the Group and the reliance GAME has on Sports Direct for supporting its future growth prospects (especially the future rollout of BELONG and GAME venues under the collaboration agreement), combined with the ongoing industry headwinds, current negative retail market outlook and the likely elongated current console lifecycle which are expected to impact the future financial performance of the Group.

The Board acknowledges Sports Direct's intention to work with the GAME team as part of its ongoing review of the business and to accelerate the evolution of the BELONG business. GAME continues to see significant opportunity with its transformation strategy and rollout of BELONG. The Board is therefore disappointed that it is not able to execute this strategy on a standalone basis. Nevertheless, the Board believes that the Mandatory Offer has the potential to deliver a number of strategic benefits to GAME's business, including the opportunity to benefit from Sports Direct's increased financial and operating support.

The Board will write to shareholders with its detailed response to the Mandatory Offer in due course.

The Board wishes to recognise the efforts of the GAME management team in driving the broader transformation strategy, the launch of BELONG and delivering significant efficiencies and right sizing throughout the business to position better the Company to navigate the challenging and evolving markets in which it operates.

Enquiries

Person responsible

The person responsible for arranging for the release of this announcement on behalf of GAME is Ruth Cartwright.

Website publication

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available (subject to certain restrictions) at www.gamedigitalplc.com by not later than 12:00 noon (London time) on the business day immediately following the date of this announcement. The content of the website referred to in this announcement is not incorporated into, and does not form part of, this announcement.

Further information

Canaccord Genuity Limited (which is authorised and regulated in the United Kingdom by the Financial Conduct Authority) is acting exclusively for GAME in connection with the Mandatory Offer and no one else and will not be responsible to anyone other than GAME for providing the protections offered to clients of Canaccord Genuity Limited, nor for providing advice in relation to the matters referred to above.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

Disclosure Requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.