Klehr Harrison Represents Electronics Boutique in Merger

Klehr Harrison Represents Electronics Boutique in Merger

By Jeff Blumenthal

“New Deals” is a Legal Intelligencer feature that reports on major business transactions and the attorneys involved. Please submit your items to Jeff Blumenthal at jblumenthal@alm.com, including a description of the deal, the purchase price and date of completion, and the attorneys involved on both sides, including firm names and titles.

Reprinted with permission from the April 22, 2005
The Legal Intelligencer.  Copyright 2005.  Further duplication without permission is prohibited.  All rights reserved.

Texas-based GameStop Corp. announced Monday that it would buy fellow video-game retailer Electronics Boutique of West Chester for $1.44 billion. The deal consists of approximately 70 percent cash and 30 percent common stock.

The combined company will have annual revenues of about $3.8 billion, with over 3,200 stores in the United States and 600 international stores. With a market share hovering around 25 percent, the new game retailer would also be able to compete with Wal-Mart.

Electronics Boutique was represented by Klehr Harrison Harvey Branzburg & Ellers, which took the company public in 1998. New York’s Wilkie Farr & Gallagher assisted with anti-trust issues.

Klehr Harrison partner Leonard Klehr, who along with fellow corporate partner William Matthews headed up the firm’s deal team, said the biggest legal obstacle to climb was the potential of conflict of interest for the majority stockowners of Electronics Boutiques. The Kim family owns 48 percent of stock in the company and brought in former Klehr Harrison partner Steve Burdumy, now a corporate partner at Drinker Biddle & Reath, to serve as its special counsel in the weeks leading up to the completion of the deal.

Burdumy, who was assisted by corporate partner James Biehl of Drinker Biddle’s Princeton office, said the other stockholders asked the Kim family to sign a three-year non-compete agreement.

In addition to Klehr and Matthews, Klehr Harrison attorneys who worked on the deal are corporate partner Barry Siegel; corporate associates Michael Rittinger, Kristen Han and Rosemarie Hoslyn; tax partner Lawrence Arem; tax associate Robert Bruce; and finance partner Richard Roisman.

Willkie Farr attorneys were partners Richard L. Posen, Michael A. Schwartz and William H. Rooney, and associate David K. Park, all in New York.

Bryan Cave advised GameStop with partners Michael N. Rosen, Jay M. Dorman, Gary W. Wolff, Robert J. Rawn and Alan H. Solarz in New York; E. Perry Johnson and Rebecca A.D. Nelson in St. Louis; and Anita C. Esslinger in London.

Counsel were Roberta G. Gordon in New York and Hal B. Morgan in St. Louis, and associates were Jill Grappell, Peter J. Guy, Brett I. Kaplicer, Kim M. Domilici and Alison B. Nightingale in New York, and Danielle Mangogna in St. Louis.