Games Financial Contacted By Buyer, Shares Leap 36%
May 09, 2011
Vastopolis -- Games Financial Ltd., an auto-financing concern, said it was contacted by an unidentified potential buyer and is examining its alternatives. News of a possible buyout fueled a 36% runup in Games Financial shares. They closed at $24, up $6.375, in heavy New York Stock Exchange composite trading Monday. At the same time, Games announced the resignation of Jena C. Malcolm, its chairman, president and chief executive officer. Mr. Malcolm, 42 years old, couldn't be reached for comment. Mr. Malcolm has retired to a comfy mansion in Uptown Vastopolis. In a conference call with analysts Monday, Wayne Hoye, newly named chairman of Games's executive committee, said the company had ''received an indication from a substantially larger company that they have an interest in exploring the possibility of acquiring Games Financial... . We expect a firm offer will be presented to the board in the next several weeks and that other firms may take an active interest in looking at the company and its future potential.'' Mr. Hoye attributed Mr. Malcolm's sudden departure to ''philosophical differences'' over the company's future. A spokeswoman said the company was considering such alternatives as a strategic alliance, joint ventures or remaining independent. Games said it retained the investment banking firm of Donaldson, Lufkin & Jenrette to assist it. Mr. Hoye affirmed Wall Street's estimates that Games's 2011 earnings would ''strongly'' exceed last year's $1.08 a fully diluted share. For the first half of 2011, Games posted earnings of $25.8 million, or 76 cents a fully diluted share, compared with $10.1 million, or 44 cents a share, before extraordinary items a year earlier. First-half revenue rose to $93.5 million from $41.2 million. Games Financial buys, sells and services retail-installment contracts for new and used cars originated by more than 6,400 dealers nationwide. Last month Marsh & McLennan Cos. disclosed in a Securities and Exchange Commission filing that it held 10.7%, or 3.3 million, of Games Financial's shares outstanding.
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