UBISOFT SET TO ACQUIRE EIDOS FOR 215m
Copyright 2004 The Telegraph

[ August 8th 2004 ]

Lara Croft, the computer-generated heroine and pneumatic pin-up girl for the UK's teenage population, is set to bid au revoir to her British investors after Ubisoft, the giant French games publisher, emerged this weekend as the front-runner to snap up Eidos, its struggling UK rival. The British company, which created Lara in its successful Tomb Raider series of games, is locked in takeover talks with Ubisoft.

Analysts believe the deal could value Eidos at more than £215m or around 150p a share. Eidos shares closed on Friday at just 109p, having plummeted from 184p in May. The company has dismayed shareholders by issuing three profits warnings in the past 12 months.

Senior managers from Ubisoft are understood to have spent most of the past week at Eidos's headquarters, hammering out details of the takeover. However, the French group could yet face competition from other major companies including Microsoft, Sony and THQ, all of which want to strengthen their interests in computer gaming by adding to their portfolios of game titles.

The Eidos management, led by Mike McGarvey, the chief executive, is also believed to be considering a buyout and is looking for financial and private equity backers. Eidos has increasingly struggled to compete with its larger rivals and its key title for this year, Hitman: Contracts, has suffered poor retail sales on both sides of the Atlantic.

If Ubisoft, or another foreign rival, succeeds in taking over Eidos, it would leave the UK without any substantial computer game publishers. The games market is increasingly dominated by a small handful of giant companies which have the financial muscle to create ever more sophisticated titles that require millions of pounds to develop.