Funco Gets Unsolicited Bid From Bookseller

Funco Inc., which sells new and used video games, said it received an unsolicited $135-million buyout offer from Barnes & Noble Inc., topping a bid from Electronics Boutique Holdings Corp. Barnes & Noble, the largest U.S. bookseller, offered to pay cash or a combination of cash and stock, at Funco’s option. The bid is 23% higher than the cash offer of $110 million, or $17.50 a share, from rival Electronics Boutique that Funco agreed to Monday. Funco said its board will meet “in due course” to discuss the new proposal. Barnes & Noble made the offer through its Babbage’s Etc. unit, a seller of video-game software it acquired last year. While Barnes & Noble declined to comment, the competing bid didn’t come as a surprise to Electronics Boutique. “The bottom line is that we have a definitive agreement, and they don’t,” said Joseph Firestone, chief executive of West Chester, Pa.-based Electronics Boutique. He declined to say whether Electronics Boutique would raise its bid. The accord between Electronics Boutique and Funco comes with a breakup fee of $3 million plus expenses, he said. Shares of Eden Prairie, Minn.-based Funco rose $3.69 to close at $20.50 in heavy Nasdaq trading. Shares in Electronics Boutique, a video- and computer-games retailer, closed up 13 cents at $19.75, also on Nasdaq. Barnes & Noble closed off 44 cents at $20.88 on the NYSE.