GameStop Issues $950M in Debt to Fund Acquisition
Grapevine, Texas, GameStop Corp. said that it plans to issue $950 million in senior notes and senior floating notes to partially finance its purchase of Electronics Boutique Holdings Corp. GameStop is buying Electronics Boutique for about $1.44 billion in cash and stock. The deal, which is expected to close late this month, would give the combined company more than 3,200 stores domestically and 600 international locations.
ShopKo Special Meeting to Proceed
Green Bay, Wis., ShopKo Stores, which agreed in April to be acquired by a private equity firm, said today that a special shareholder meeting to approve the proposed deal will go ahead as scheduled Sept. 14, after a court denied a request by dissident shareholders seeking to block the deal.
The Circuit Court for Brown County, Wis., denied a motion by plaintiffs to prevent the meeting from happening, ShopKo said.
New CEO for Sears; More Expanded Role for Lampert
Chicago, Sears Holdings Corp. named Aylwin Lewis to replace Alan Lacy as chief executive and president. Lacy, who headed Sears, Roebuck and Co. from 2000 until its March acquisition by Kmart, will continue to serve as vice chairman and a director. Lewis, whose appointment is effective Sept. 30, is president of Sears Holdings. He previously had been CEO of Kmart. At the same time, hedge-fund wizard Edward Lampert, who engineered the merger and is the chairman of the combined company, is taking a more hands-on role. He will direct the marketing, merchandising and on-line businesses of Sears Holdings and its Lands’ End unit.
“Alan, Aylwin and I believe these changes will achieve greater clarity in our operating management and align this corporate structure with our vision of Sears Holdings,” said Lampert. “Our goal is to build one company with multiple ways of connecting with our customers, including our various store formats, on-line offerings, service relationships and credit products.”
During his tenure, Lacy overhauled the layout and inventory of Sears’ full-line stores, bought the Lands’ End specialty catalog and sold the credit division to Citigroup. But he was unable to stem Sears’ long-term sales slump.
The announcement concerning the shake-up at the top was announced along with Sears’ second-quarter results. The chain said second-quarter net profit rose to $161 million, or 98? a share, from $154 million, or $1.54 a share, a year ago. Earnings were impacted because of a large increase in shares outstanding associated with the merger, which was completed in May.
Total revenue rose to $13.192 billion from $4.797 billion last year, due primarily to the addition of Sears, Roebuck revenue of $8.6 billion. Kmart’s same-store sales decreased 0.3%. Sears’ same-store sales declined 7.4%.
The company said about 20 Sears and Kmart stores and facilities located in Louisiana and Mississippi were damaged by Hurricane Katrina. It expects the majority of the losses to be covered by insurance.