GameStop-EB merger gets SEC approval
Both stocks surge as a result of announcement; stockholders set to vote on deal early next month.
There's one less barrier standing between the union of gaming retailers Electronics Boutique and GameStop, as the companies announced today that their proposed merger has been "declared effective"--"approved" in non-finance speak--by the US Securities and Exchange Commission.
Stocks for both companies were up sharply today as a result of the announcement. Shortly after 2 p.m. EDT, GameStop was up almost 5 percent, with a $1.62 gain leading the stock to trade at $35.45, while Electronics Boutique was up $1.36 to $65.84, a gain of more than 2 percent. Since the announcement of the merger, both companies have seen their stock price increase by more than 50 percent.
Now the companies will put the vote to their investors at their simultaneous respective annual stockholders meetings on October 6 at 1 p.m. EDT. The boards of directors for both companies have given the merger the thumbs-up and have advised their stockholders to do the same. If approved, the deal is expected to be closed shortly thereafter.
Each company operates roughly 2,000 stores worldwide. Combined, they're expected to hold a market share of about 20 percent, making the new company the second-biggest gaming retailer in the US, behind only Wal-Mart.
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