by Gene Turnbow
The progress of the much publicized purchase of Thinkgeek by Hot Topic appears halted in its tracks this morning. Both Geeknet, Thinkgeek’s parent company, and Gamestop have now both issued press releases announcing the acquisition of Thinkgeek by Gamestop.
In the original deal, Hot Topic was supposed to have acquired Thinkgeek for $17.50 a share. Gamestop beat out that price, offering $20 a share, and paid off Hot Topic’s termination fee for their trouble (which they legally didn’t have to do, but it was smart business to be nice about it). That gives the deal an “equity value of approximately $140 million, including $37 million of cash and cash equivalents as of March 31, 2015.” Gamestop waited until June 1, the last possible day for another offer, and sniped it, like an eBay contender. Hot Topic did not have time to set up a counter offer.
When word got out last week that Hot Topic was about to acquire ThinkGeek, long time fans of the geek merchandiser had mixed reactions. While many people just thought it was an odd fit and mildly amusing, others believed the retailer would commoditize geek interests in the same way it did punk culture. The concerns weren’t without at least some justification. Hot Topic has been trying to insinuate itself into geek culture for a couple of years now, and has been a significant sponsor of Stan Lee’s Comikaze in Los Angeles for the past two years running.
Gamestop becoming Thinkgeek’s parent company makes more sense, since they already sell products based on many of the same licenses. We predict that there will be some cross-polination of inventory between ThinkGeek.com and the GameStop retail stores. Imagine being able to actually see and touch the Thinkgeek stuff before you buy it. Hot Topic would only have been able to do this with clothing items.
Assuming no further interruptions, the GameStop acquisition is expected to close by the end of the second quarter in 2015.