SCi counteroffer derails Eidos buyout

Conflict: Vietnam maker tops Elevation Partners with $144 million bid for the house that Lara Croft built.

After months of quiet, news on the Eidos takeover front has exploded this week. On Sunday, British newspaper The Daily Telegraph ran a story saying that SCi Games, creator of Conflict: Vietnam and the Richard Burns Rally series, was "poised to make an eleventh-hour bid" for the once-mighty Tomb Raider publisher.

However, that story seemed to fizzle out late yesterday, when Reuters reported that Elevation Partners, the Silicon Valley-based venture-capital group, which sports U2 lead singer Bono on its board, had offered 71 million pounds ($135 million) in cash for Eidos. Statements from Eidos executives made it sound like the Elevation buyout was a done deal. "The board firmly believes that shareholders' interests are best served by a sale of the company," company chairman John van Kuffeler said in a statement.

However, this morning, numerous news outlets reported that SCi had trumped Elevation Partners with a 76.1 million-pound ($144.6 million) offer of its own. However, unlike Elevation's cash bid, SCi's offer comes in the form of a stock swap, in which it would offer Eidos shareholders one share of SCi stock for every six shares of Eidos. It also had the benefit of being supported by Schroders, the global-asset management fund, which is Eidos' biggest shareholder, owning 21 percent of the publisher. "Hopefully cost savings will come through and the shareholders will benefit," fund manager Andy Brough told the Bloomberg news service. "We hope one plus one equals three."

Since Eidos is now the subject of not one but two takeover offers, its board of directors have pulled back to mull over the situation. In a very brief statement, the board jointly said it "will consider the Share Offer in the light of its other alternatives, including the recommended cash offer of 50 pence per share by EM Holding Corp., a company backed by Elevation Partners. A further announcement will be made in due course."

Regardless of what Eidos' board decides, the market has given its blessing to the buyout. Eidos shares ended the day up 23 percent at 55.3p ($1.05) per share. SCi's stock also spiked, ending the day up nearly four percent at 333.5p ($6.31).

GameSpot will have the latest developments in the Eidos buyout saga as they become available.

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