Eidos "in preliminary discussions" for takeover

Eidos shares climb in London as media reports say major publishers are looking to buy the ailing company.


Eidos shares spiked yesterday on the London stock exchange as speculators, anticipating that a takeover of the publisher was imminent, sought to increase their positions in the wobbly publisher. Shares in Eidos Plc climbed 11 percent, closing at 1.07 pounds (about $1.95).

While news of the looming takeover was reported in various mainstream and financial newspapers, yesterday there was no consensus as to who the buyer might be. "Gossips...reckoned French games developer Ubisoft could be lining up a bid," said the Express. "Speculation has centered on American players Activision and Electronic Arts as the most likely buyers of the company," said the Independent.

The Guardian also chimed in, saying "Infogrames [is] in the background." However, the French publisher seems the least likely candidate. Besides a weak earnings report that has sent its stock slipping--its shares lost 15 percent of their value yesterday alone--the company has a checkered history with Eidos. Infogrames was in talks to buy Eidos four years ago, but those talks cooled almost as quickly as they began.

A statement issued by the company itself cast no additional light on the subject. As reported in today's Wall Street Journal, "Eidos said Tuesday that, whilst it continues to keep all options under review, it is in preliminary discussions with a small number of parties in relation to possible business combinations," but added there were no guarantees the "discussions" would lead to a deal. "These discussions are at a preliminary stage and there can be no certainty as to whether or not they will lead to an offer being made for the Company in due course."

Coincidentally, Eidos' share price spike occurred on the same day after it announced that Championship Manager 5 was on its way to both Xbox and, for the first time, PlayStation 2 gamers in early 2005.

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