Square Enix Offers $120 Million To Buy Eidos

By Spencer . February 12, 2009 . 1:47am

eidos

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.


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  • http://www.siliconera.com/ Ishaan

    Another Legacy of Kain with input from Square Enix would be much welcomed. It would be great to see a new game in the series use art by Amano. Doubt that will ever happen, though.

    It’s more likely that they’ll set Tetsuya Nomura on redesigning Lara Croft for Eidos’s next attempt at Tomb Raider “revival.” Then again, if he can make her look more…normal…I’m all for it.

  • lostinblue

    Tomb Raider RPG! Final Raider!

    I kinda want Eidos to pull a Tecmo though, just for the lulz. Eidos-Tecmo-Koei gogogogogogogo!

  • daizyujin

    Well they finally announced this eh? Six months I have been wondering when. Not sure though, it looks like an act of despiration to me.

    • http://www.siliconera.com/ Ishaan

      Yeah, seriously…Eidos? Tecmo? I don’t know what Square is thinking.

      • lostinblue

        They want to be some kind of Japanese Electronic Arts that’s what :D

        Seriously though, Square-Enix IMO got kinda lost in the last few years and Final Fantasy is a wreck now and all… But I want them to keep being mostly a RPG company; and buying Eidos/Tecmo is not exactly my notion of that, hence I rather see then focusing on them, Bethesda would be a good purchase for them, for instance (this said I HATE bethesda games, but… would make more sense than eidos anyway)

        I’m not sure if I want to see this new “Square-Enix” basically.

        Oh, and 120 million? that’s too little, I think. Final Fantasy XIII must be costing well over 100 million in itself, seeing next gen development costs 120 million must be covering like… the cost of 4 HD games or so. Eidos is only getting bought by that amount if they aren’t worth anything now (I dunno) or don’t want to.

        • Koyota

          Sorry, even with square-enix’s vast cash flow, they are not in anyway able to buy ZeniMax(Bethesda’s parent company). The only reason that can make this deal is because Edios is really in pain right now money-wise

          • lostinblue

            yeah, I can see that, it just doesn’t strike me as something Square should be aiming for.

        • daizyujin

          I agree. While they have made some decent games outside of the RPG genre, they have shown more often that it isn’t really their forte. Given that, it is better they stick to their core competency of making RPGs.

          I think it just boils down to the fact that numbers are showing that the Japanese game market is shrinking and they seem to just be running around like a chicken with it’s head cut off looking for some way into the larger western market. As much as some of Squenix’s games can make, they also are huge and expensive to make, just look at how long FF XIII is taking. Perhaps this is a way to leverage that with shorter games that cost less to produce and have shorter turn around times. All in all though, like Koyota says it is not because Eidos is a great choice (It’s not, we can all think of better ones.) but the only one they can probably afford. Taito it ain’t.

      • http://www.siliconera.com Spencer

        I think Square Enix is trying to diversify the kinds of games they publish and expand beyond their bread and butter. We know Square Enix as an RPG company, but they’ve been picking up stuff outside of their arena like Bond for Japan. Acquiring Eidos would be another step towards their diversification goal. Plus they would get a bunch of new engines and development software to play with.

  • squall3031

    we shall see Square Enix X Eidos strategy RPG :D

  • ShadowYuri

    Well, according to the critics made on several RPGs on the New Generation (often bad, though not always well deserved), it makes sense to me that Square Enix tries to buy another compagny specialized in a different type of game. And plus, Koyota has a point : Eidos is not doing so well nowadays, so…

  • jarrodand

    I dunno, the Taito buyout’s gone wonderfully after a lot of initial handringing speculation. I kinda expect the same of Eidos, with Square Enix largely staying out of the way in terms of actual game R&D.

    Eidos’ European distribution channels will also give Square Enix a greater immediate presence over there, and now Eidos has a huge partner in Japan. This really seems like win/win from all sides.

  • DeisticBrace

    How long until Square-Enix-Goya become a reality?

  • shion16

    cmon!!!
    first tecmo, now eidos??
    dont mess with the western market

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