By Spencer . February 12, 2009 . 1:47am
The board of directors governing Eidos and Square Enix have settled on a buyout bid of 84.3 million GBP an equivalent of $119.8 million going by today’s exchange rate. Both parties will move forward with a shareholder recommendation at the next meeting and if at least 75% of the shareholders accept the offer Square Enix will own Eidos. At a 258% premium over the mid-market closing price of 9 pence per share why shouldn’t share holders accept the deal? Square Enix also assures that following the close of an offer, if completed, the existing employment rights, pension rights, of the management and employees will be fully safeguarded. Warner
On the other side of the table why is Square Enix interested in Eidos? Yoichi Wada, President of Square Enix, explained, “Eidos is a talented developer and publisher of interactive products with a broad portfolio of highly successful mass market franchises, led by Tomb Raider, one of the most successful video game franchises of all time. Eidos maintains a strong reputation for high quality development and proven expertise in creating characters and storylines that appeal to customers. Eidos’ products are highly complimentary to our business and will accelerate our aggressive expnasion into Western markets. We believe that wide range of both companies’ quality products encompassing major genres will enable us to meet diversified customers’ expectations on a global basis.”
Tim Ryan, Chairman of Eidos, seems pleased with the offer. “We believe this cash offer provides Eidos shareholders with an attractive price and certainty in today’s challenging market backdrop and economic outlook. The acquisition of Eidos will complement Square Enix’s expansion into Western markets and offers mutually beneficial opportunities for the combined group. The board believes that this offer is in the best interests of the shareholders.”
OK, we get it. Square Enix wants in on Western development. Buying Eidos would immediately give Square Enix access to Eidos owned studios like IO Interactive and Crystal Dynamics. However, Eidos core franchises – even Tomb Raider don’t hold the candle they used to.
Images courtesy of Eidos / Square Enix.