Ubi Soft Snatches I-Magic CD-ROM

Since announcing its intention to spin off and sell its CD-ROM division early this year, Interactive Magic has finally announced a buyer in Paris-based Ubi Soft Entertainment, best known for the Rayman series, Pod, and other games.

Ubi Soft purchased the CD-ROM division for an undisclosed amount of cash, much needed at Interactive Magic after the company reported yet another quarter of losses. Interactive Magic meanwhile will concentrate on building online games, including the recently announced Red Fury, to be released later this year.

"This is an important step for Interactive Magic," said I-Magic chairman and CEO J. W. "Wild Bill" Stealey. "This transaction will strengthen our balance sheet with cash and will enable us to devote all our resources toward our high-growth Internet entertainment community business."

It is currently unknown which games will be kept or cancelled by Ubi Soft. Many of I-Magic's CD-ROM division's games had been put on hold until the purchase was finalized, which might account for the delay of Mortyr to retail stores and inactivity of various beta tests for Road to Moscow and Shadow Company.

On another related note, it appears that Stealey may be trying to get out of his leading role at I-Magic. Rumors have surfaced that Stealey intends to sell two million shares of I-Magic stock (as of March 31, 1999, he owned roughly 2.7 million shares) soon after the sale of the CD-ROM division. So far there are no indications that Stealey has sold a substantial portion of his stock, however.

I-Magic's stock (IMGK) jumped slightly when news of the sale hit the Internet, but two hours before the close of the market the stock value had almost returned to its starting point for the day.