Copyright 2004

[ May 21st 2004 ]

Nervousness surrounded trading in Innovation Group and Regus yesterday but it had nothing to do with the underlying performance of the two companies. Investors fear that Robert Bonnier, the former chief executive of, may need to raise money by selling down his significant shareholdings in both group's after taking a very large hit from Thursday's meltdown at Eidos. Eidos shares dropped 30 per cent after it issued a profits warning, and a further 6.75p to 113.75p yesterday. This is very bad news for Mr Bonnier who, via a series of spread bets, has built up his 8.2 per cent interest in the computer games developer at prices well above 155p. Dealers estimate that the former Scoot boss could be down by as much as 7m as a result of his position.

In order to fund this loss, market professionals reckon he will have to cash in on his holdings in Regus and Innovation Group. He controls 8.9 per cent of Regus and 18.4 per cent of Innovation via ICE SAS, a Paris-based investment vehicle. Unlike his foray into Eidos, Mr Bonnier has done very well from Regus and Innovation. Shares in Innovation have more the doubled since he started buying into the software group while Regus' stock has quadrupled. Hence, Mr Bonnier has plenty in the way of paper profit, which he could use to subsidize his losses at Eidos. But should cash in these profitable holdings, it is bound to weigh on the share prices of the two companies in the near term. It was this worry that sent Regus down 4p to 61p and Innovation 0.75p lower to 33p yesterday.

Altium Capital argued that Eidos' profits warning also spells bad news for Game Group, down 1.75p to 61.25p. Eidos not only talked of soft demand in its markets but also complained of weaker than anticipated orders of its Hitman: Conflict title. Game, the computer software retailer, is also likely to be negatively impacted by this, especially as Hitman: Conflict was expected to be one of the top titles to be released on the market this year.

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