Eidos in acquisition talks
Tomb Raider publisher says it has entered "very early stage" of buyout discussions with mystery suitor.
A rescue may be on the way for beleaguered publisher Eidos. Today, the Tomb Raider production house announced that it has entered into preliminary buyout talks with an unnamed suitor.
"The Board can announce that it has received a preliminary approach which may or may not lead to an offer being made for the company," the publisher said in a statement. "Eidos emphasises that discussions are at a very early stage and that there can be no assurance that an offer will be forthcoming."
Even before the global financial slump began weighing heavily on the gaming industry, Tomb Raider publisher Eidos was staring down choppy economic waters. In a bid to rein in costs and refocus the company's efforts on games with profitability potential, the British game company slashed its workforce by 200, canceling 14 games in the process.
Despite those efforts, as well as a £60 million ($88.3 million) fund-raising share sale, Eidos has continued to post poor fiscal results into 2008. As part of its fiscal year-end report released in September, the publisher revealed losses of £99.1 million ($146 million) on slumping revenues of £118.9 million ($175 million) during the period. That situation is all the more exacerbated by the lackluster performance of Tomb Raider Underworld, which sold 1.5 million in its first six weeks on the market, 500,000 less than what the publisher had projected.
Eidos did not give any indication as to who may be interested in acquiring its operations. However, in the past, a number of rival publishers have reportedly expressed interest in purchasing the company, including Ubisoft and Electronic Arts. Time Warner, which increased its stake in the publisher to nearly 20 percent in December, has also recently looked to expand its presence in the gaming space, with chief financial officer John Martin saying earlier this year that the "games area is an area that intrigues us."
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