EIDOS PLC STILL LOCKED IN TALKS

[ 16 August 2000 ]

British computer games maker Eidos Plc said it was still in talks that might lead to an offer for the company. French video games software maker Infogrames Entertainment said at the end of July that the British creator of cyber-heroine Lara Croft was in its sights but that the two parties were still far from final-stage negotiations. Eidos shares rose four percent on Tuesday's news to 430 pence, valuing it at approaching half a billion pounds. It first said it was in early-stage talks on June 20 and declined on Tuesday to say if Infogrames was involved. Other potential French suitors have circulated on the rumour mill.

The Sunday Express said Ubi Soft Entertainment had approached Eidos with a cash offer below the seven pounds a share Infogrames was thought to be discussing in an all-share offer. Eidos, which established itself with its Croft-starring Tomb Raider series, has issued profit-warnings as it endeavours to adapt to new-generation gaming platforms. Analysts have also expressed concerns that the London company has yet to find another winner like Lara Croft to spread its risks.

Electronic Arts Inc, which had annual turnover of $1.4 billion in 2000, is the world leader in computer gaming. It has also been cited in the media as a potential bidder. Havas Interactive, a unit of Vivendi, has denied speculation it was also in talks to buy Eidos. Takeover speculation doubled Eidos" share price to above five pounds when it first surfaced, from a 250p low in May, but since then the shares have slipped again. Morgan Stanley Dean Witter is advising Eidos alongside house broker, Dresdner Kleinwort Benson.