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[ March 22nd 2005 ]

Heavy trading on Eidos' stock spurred on by an approach from SCi and Elevation Partners has seen the beleaguered video-game publisher add 11 pence (24.58%) to its market capital as a bidding war ensued for the creator of Lara Croft. Overnight, Elevation Partners - a private equity group helmed by U2 singer Bono and former Electronic Arts president John Riccitiello and armed with a 500 million pound war chest - tendered a bid which valued Eidos at 71.0 million. As Eidos' share price rocketed during morning trade, British publisher SCi countered with an all-share offer valuing Eidos at 76.1 million. Eidos has yet to formally accept either bid.

Eidos bolsters an arsenal of leading IPs including the phenomenally successful Tomb Raider and Hitman franchise. The publisher has been seeking a buyer since 2004, blaming a down-turn in industry consumption coupled with the under-performance of leading titles - including The Angel Of Darkness - for its financial haemorrhaging. Once the pinnacle of British publishing and valued at GBP 1.5 billion, Eidos has seen a steady decline in its share price during the past five years. After posting losses of 28.7 million end of December 2004, Royal Bank of Scotland handed over a 20 million short-term loan stipulating that Eidos must declare an offer within two weeks or face the risk of being forced to sell off assets.

SCi Entertainment Group describes itself as one of the UKís leading publishers of computer games, with a valuable portfolio of intellectual property and a year on year track record of both profitable growth and chart success. SCi is helmed by Jane Cavanagh, a former BT employee who formed the company in 1988. She confirmed the offer to the City earlier today. "I can confirm today that SCi Entertainment Group has announced intention to make a share for share bid offer to acquire British publisher Eidos PLC. Eidos has an excellent portfolio of successful titles and has been at the very forefront of the games industry, but it is no secret that the company has experienced turbulent times in recent years."

Elevation Partners describes itself as a newly formed private equity firm that makes large-scale investments in market-leading media, entertainment, and consumer-related businesses. Elevationís focus is on intellectual property businesses where it can partner with management to enhance growth and profitability through a combination of strategic capital and operational insight.

Elevation Partners include: Fred Anderson (former EVP and CFO of Apple Computers), Marc Bodnick (founder of Silver Lake Partners), Roger McNamee (founder of Silver Lake Partners and Integral Capital Partners), Bret Pearlman (former Senior Managing Director of The Blackstone Group), John Riccitiello (former President and COO of Electronic Arts) and Bono (lead singer and co-founder of U2).

The bidding war between SCi and Elevation Partners brings to an end months of speculation on the future of Eidos, its employees and shareholders.

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