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LARA CROFT FIRM
MAY BECOME HUNTED
Copyright 2002 www.ft.com
[ May 13th 2002 ]
Eidos,
the UK computer games company renowned for its
sultry game heroine Lara Croft, could be the subject
of a takeover approach from French rival Ubi Soft,
French business paper Les Echos has learnt. "We
are certainly going to grow by acquisitions this
year," said Yves Guillemot, Ubi Soft executive
chairman. "Within that framework, Eidos could
be a target for us. Whatever happens, I think
that company will be bought in the course of the
year."
Shares
in Eidos rose 20p, or 14 per cent, to 161p in
early trading on Monday. They have fallen 54 per
cent this year, reducing its market capitalisation
to £195m. The fall has been made worse by the
company's announcement in March that sales in
the current financial year are likely to be less
than £120m, some 12 per cent below predictions.
Further, the company said it was set to make an
operating loss of £9m.
Ubi Soft,
best known for its Rayman character, has meantime
seen its shares fall 28 per cent and is capitalised
at E522m. Fourth-quarter sales figures, just published,
show a 14 per cent increase in revenues to E90.5m,
lifting the full year total by 42 per cent to
E369m. Brokers expect the company to have earned
net profits of E13m.
Bruno
Hareng, an analyst at broker ING Barings, said:
"This acquisition is not to be ruled out, even
if I think that it's a rather too-big target for
Ubi Soft. Whatever happens, if Eidos is going
to be sold the deal must happen before November
15, when the next Lara Croft game on PlayStation
2 is due to be launched. After that date, with
help from sales of the game, the price of Eidos
shares is likely to go back up."
Although
Eidos has been obliged to defer the launch of
some other games into next year, it has E77.2m
in cash and should start to see some benefit from
a cost-cutting restructuring before the end of
the year. Ubi Soft is not the first French games
company to take an interest in Eidos. Two years
ago Infogrames, the independent games company
headed by Bruno Bonnell and best known for games
such as Driver and Alone in the Dark, held unsuccessful
takeover talks with its British rival.
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