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Square Enix to buy Tomb Raider firm Eidos
Source: Agencies |
February 12, 2009, Thursday
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Print Edition
JAPANESE video games maker Square Enix has agreed to buy the British firm behind titles such as "Tomb Raider" and "Championship Manager" for 84.3 million pounds (US$120.8 million) to extend its reach in Europe.
Square Enix, known for the "Dragon Quest" and "Final Fantasy" role-playing games, said on Today it would pay 32 pence a share in cash for Eidos, which has been hit by weaker-than-expected US sales of "Tomb Raider: Underworld," its latest game starring scantily-clad swashbuckler Lara Croft.
That is over three times above Eidos' closing share price of 9 pence on January 14, the day before it announced a bid approach.
The deal turns up the heat on US media giant Time Warner, which owns 20 percent of Eidos and has been tipped as a potential bidder.
Time Warner could not immediately be reached for comment.
Eidos shares more than doubled in value today to 31 pence -- just below the offer price. At 0905 GMT, they were up 116 percent at 30.25 pence.
Eidos said reduced profit expectations meant it might have to enter talks with its lending bank over the June 2009 test of its financial position.
"Eidos maintains a strong reputation for high quality development and proven expertise in creating characters and storylines that appeal to consumers," Square Enix President and Representative Director Yoichi Wada said in a statement.
"Eidos' products are highly complementary to our business and will accelerate our aggressive expansion into Western markets."
Square Enix said it had received undertakings in support of its bid from Insight Investment Management and Cazenove Capital Management, which together own about 13 percent of Eidos.
These undertakings will lapse if a third party tops Square Enix's offer by at least 15 percent.
Square Enix said it would fund the deal from internal cash resources and expected it to close in April.
UBS is advising Square Enix, while Citi is acting for Eidos.
Square Enix, known for the "Dragon Quest" and "Final Fantasy" role-playing games, said on Today it would pay 32 pence a share in cash for Eidos, which has been hit by weaker-than-expected US sales of "Tomb Raider: Underworld," its latest game starring scantily-clad swashbuckler Lara Croft.
That is over three times above Eidos' closing share price of 9 pence on January 14, the day before it announced a bid approach.
The deal turns up the heat on US media giant Time Warner, which owns 20 percent of Eidos and has been tipped as a potential bidder.
Time Warner could not immediately be reached for comment.
Eidos shares more than doubled in value today to 31 pence -- just below the offer price. At 0905 GMT, they were up 116 percent at 30.25 pence.
Eidos said reduced profit expectations meant it might have to enter talks with its lending bank over the June 2009 test of its financial position.
"Eidos maintains a strong reputation for high quality development and proven expertise in creating characters and storylines that appeal to consumers," Square Enix President and Representative Director Yoichi Wada said in a statement.
"Eidos' products are highly complementary to our business and will accelerate our aggressive expansion into Western markets."
Square Enix said it had received undertakings in support of its bid from Insight Investment Management and Cazenove Capital Management, which together own about 13 percent of Eidos.
These undertakings will lapse if a third party tops Square Enix's offer by at least 15 percent.
Square Enix said it would fund the deal from internal cash resources and expected it to close in April.
UBS is advising Square Enix, while Citi is acting for Eidos.
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