GAME in takeover discussions with unnamed suitor

Leading UK videogame retail chain GAME Group has revealed that it is currently in preliminary negotiations with a possible buyer, as shares in the company hit a 52 week high on the London Stock Exchange this morning.

In a short statement issued to the London financial markets, GAME Group confirmed that it "is in discussions which may or may not lead to an offer for the company," but did not name the suitor - or suitors - who have approached the firm.

Two obvious candidates, however, are US giants Electronics Boutique and GameStop, both of which have made clear their intentions to expand rapidly in the European market in the coming years.

GameStop recently revealed plans to open 35 stores in the UK over the coming year, building on its first move into the British Isles with the acquisition of Irish chain GameZone, while Electronics Boutique has so far steered clear of the lucrative UK market but is pursuing an aggressive expansion policy on the continent.

In the US, many market watchers have believed for some time that a bid to acquire GAME by one or both of the top American chains is on the cards, with the move being seen as a logical expansion for either of the two rival firms.

Today's announcement came as GAME's stock rose to a 52 week high on the London Stock Exchange, building on significant gains over the past few days with an additional 4.5 per cent rise, bringing the share price to 80 pence.

GAME Group, which is believed to account for over half of all sales in the UK leisure software market, currently has a stock market capitalisation of just over £272 million - around $512 million.