GameStop Buys ThinkGeek out From Under Hot Topic at the Last Minute, but Why?
GameStop has lived up to its name and put an end to Hot Topic’s play at acquiring Geeknet (ThinkGeek’s parent company) by buying the company themselves, instead.
GameStop made the announcement this morning, and it even acknowledges the Hot Topic deal:
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.
Yes, Hot Topic was really going to acquire ThinkGeek as we reported last week, but GameStop must have wanted the company more—and must have had the cash to pay that termination fee.
It’s hard to know what this acquisition will mean for customers of either company or the stores’ futures, especially since GameStop doesn’t seem like quite as obvious a pair for ThinkGeek as Hot Topic, no matter how you may have outgrown Hot Topic over the last ten to fifteen years. For GameStop, of course, the most obvious effect will be growing more into the merchandise space, with CEO Paul Raines saying,
This acquisition creates value to all stakeholders involved. The addition of Geeknet is an important expansion of our global multichannel platform and we are excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles category and deepen relationships with our existing customer base.
For ThinkGeek, hopefully it just means getting bigger and better with a retail giant like GameStop behind them. Geeknet CEO Kathryn McCarthy said,
Our Board and management team believe this transaction is in the best interest of Geeknet and its stockholders. As a part of GameStop’s family of brands, Geeknet will be well-positioned to achieve our goals of increasing our brand awareness and expanding our product offerings.
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