April 18^th, 2005 (12:18pm) - Video game retailer GameStop has agreed to buy out rival Electronics Boutique Holdings for $1.44 billion in cash and stock.

Announced Monday, the buy out is meant to help GameStop enter new international markets.

Shareholders of specialty chain Electronics Boutique will receive $38.15 in cash and the equivalent of 0.78795 shares of GameStop Class A common stock for each Electronics Boutique share, the company said. That is a premium of 34.2 percent, based on Friday’s closing prices for the stocks.

GameStop said it expects the deal to significantly add to its diluted earnings per share in the second half of its fiscal year 2005 and in 2006. It also expects "meaningful" pretax savings, beginning in fiscal year 2006.

Once the deal closes, GameStop Chairman and Chief Executive Richard Fontaine and Chief Operating Officer Daniel DeMatteo will retain their roles at the combined company.

Shareholders representing about 47 percent of Electronics Boutique’s voting shares have already pledged their support for the deal, GameStop said.