(Bloomberg) -- GameStop Corp. launched its biggest rally in five years following a report that it's working with Perella Weinberg Partners to explore a possible sale of the embattled video-game chain.
The retailer, the subject of takeover speculation for months, is now running a formal auction, according to DealReporter, which cited unidentified people familiar with the situation. The private equity firms Sycamore Partners and Apollo Global Management are GameStop's two main suitors, DealReporter said.
The report rekindled investor hopes that a buyout could bring them a payday following a five-year stock slide. The company said in June that it was holding “exploratory discussions” with third parties about a potential deal. But it warned at the time that the talks could lead nowhere, and shareholders have been waiting for an update.
The shares gained as much as 16 percent to $16.32 on Wednesday, marking their biggest intraday rally since August 2013. The stock had been down 22 percent this year through Tuesday's close.
The Grapevine, Texas-based company has been struggling to remain relevant in an era when more and more gamers download their software, rather than buy it at a store.
To contact the reporter on this story: Nick Turner in Los Angeles at nturner7@bloomberg.net
To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net
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