In what might equate to a slap-hands girl-fight in the nerdy business world, today video game retailer GameStop has bought GeekNet – ThinkGeek‘s parent company – even though GeekNet had previously agreed to be bought by fashion/pop-culture retailer Hot Topic. The deal, as reported in a press release this morning on GameStop’s website, is for $20.00 per share, a sizable increase from the $17.50 per share that Hot Topic had offered. The difference in price may have been done in order to give GeekNet enough funds to pay the termination fee they’ll owe to Hot Topic in order to void the first contract. GameStop says the deal has a “total equity value of approximately $140 million.”
The GameStop press release went on to say:
Geeknet also announced that it had terminated its previously announced merger agreement with Hot Topic, Inc. (“Hot Topic”). Following discussion with both GameStop and Hot Topic, the Board of Directors of Geeknet determined that the GameStop transaction represented a superior proposal. Geeknet will pay Hot Topic a termination fee pursuant to the Hot Topic agreement, for which GameStop has agreed to reimburse Geeknet.
“A superior proposal,” eh? Sounds like fightin’ words to me! While there is a loose video game/pop culture connection between the two companies’ offerings, it remains to be seen what GameStop’s plans for the ThinkGeek brand will be. This is similar to the former Hot Topic deal, where speculation was running rampant about how and if ThinkGeek’s online sales model might be altered.
For its part, GameStop obviously thinks this is a great deal for them – they stated in their press release, “The transaction provides a natural extension of GameStop’s existing product offering and is expected to add an immediate incremental $100+ million in annual net sales.” If GameStops’ end goal was to move into a broader retail-oriented experience aimed at pop culture-loving customers, then we may very well be seeing an influx of ThinkGeek’s products in stores sooner rather than later.
To my knowledge, there was no “bad blood” or former rivalry-type feelings between GameStop and Hot Topic. Now, however… well, let’s just say you should all be keeping one eye open for groups of the two stores’ employees looking to rumble in the mall food court.
Category: Nerd Culture