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GameStop acquires Geekenet’s owner for 140 million

By Angela Gonzalez-Rodriguez

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GameStop has announced it will acquire Geeknet, owner of the apparel site Thinkgeek, for 140 million dollars, rejecting thus an earlier acquisition deal from pop culture retailer Hot Topic.

GameStop Corp. (NYSE: GME), a family of specialty retail brands, and Geeknet, Inc. (Nasdaq: GKNT), the parent company of ThinkGeek and ThinkGeek Solutions, Tuesday announced they have entered into a definitive agreement under which GameStop will acquire all of the outstanding shares of Geeknet’s common stock for 20 dollars per share in cash.

The transaction has been approved by the board of directors of both companies and will be completed by means of a tender offer. The transaction has a total equity value of approximately 140 million dollars, including 37 million dollars of cash and cash equivalents as of March 31, 2015.

“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,” stated Paul Raines, chief executive officer of GameStop.

Geeknet also announced that it had terminated its previously announced merger agreement with Hot Topic, Inc. which offer valued the company at 122 million dollars to accept the video game chain's "superior proposal."

“Our Board and management team believe this transaction is in the best interest of Geeknet and its stockholders,” said Kathryn McCarthy, chief executive officer of Geeknet. “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.”

Geeknet will pay Hot Topic a termination fee, which GameStop will reimburse, the companies said.

"The addition of Geeknet is an important expansion of our global multichannel platform," says GameStop CEO Paul Raines in a statement. "We are excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles category."

The deal is expected to close by GameStop's second quarter.

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Geeknet