GRAPEVINE, Texas (AP) — Geeknet, parent company of ThinkGeek and ThinkGeek Solutions, has ended its agreement to be purchased by Hot Topic so it can accept a higher bid from video game retailer GameStop.
Geeknet Inc. announced Tuesday that GameStop will pay $20 per share, or about $134.6 million. The companies put the deal’s value at approximately $140 million.
Last week Hot Topic Inc. agreed to buy Geeknet for $17.50 per share, or $117.3 million. But Geeknet received a $20-per-share offer a day later, although the bidder’s name wasn’t named at the time.
Geeknet said Tuesday that after talks with GameStop and Hot Topic, its board decided that the GameStop deal was a “superior proposal.”
Privately held Hot Topic will be paid a termination fee by Geeknet, which will be reimbursed by GameStop.
ThinkGeek, based in Fairfax, Virginia, sells clothing, toys, gadgets and other products mostly based on popular movies, television shows and brands with “geek” appeal. That includes “Star Trek,” ”The Big Bang Theory,” ”Star Wars” and the Marvel brand. Its ThinkGeek Solutions business distributes video-game themed merchandise through licensed Web stores.
GameStop Corp., based in Grapevine, said that it expects the deal to add more than $100 million to its annual sales.
GameStop has 6,600 stores while Geeknet is a retailer that sold $141 million of its geek-chic merchandise last year, through several websites, including ThinkGeek. GameStop sees Geeknet’s varous offerings, including “World of Warcraft” and “Mass Effect” merchandise, as products that can be marketed to its video game buyers. ThinkGeek will also give GameStop some new distribution options.
Paul Raines, chief executive officer of GameStop, stated, “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.”
The boards of Geeknet and GameStop have approved the transaction, which is targeted to close by the end of GameStop’s second quarter.
Shares of Geeknet shed 7 cents to $19.71 in morning trading, while GameStop’s stock declined 55 cents to $42.92. – additional reporting by Robert Francis, Fort Worth Business Press