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Eidos Board Recommends SCi Offer

Eidos Board Recommends SCi Offer

April 7, 2005 | By David Jenkins

April 7, 2005 | By David Jenkins
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More: Console/PC

The ongoing soap opera of who will be purchasing British publisher Eidos Interactive looks to be reaching a conclusion, with the Eidos board of directors recommending the acquisition offer from the SCi.

The board had previously favored the bid from American private equity firm Elevation Partners, in part because SCi’s takeover promised to see a more radical shake-up of the company and its management. This is despite SCi’s share offer giving £0.728 per share, compared to the £0.50 per share cash deal from Elevation.

Although a new counter-offer from Elevation had been expected, none has been forthcoming, and it seems as if the board has given into pressure from share holders. Even so, their recommendation was not without caveats, as they pointed out various risks and advised worried shareholders to sell their shares on the open market.

According to Eidos’ statement: "In the light of the recent movement in the SCi share price and in the absence of an increased cash offer from Elevation, the Board recognises that whilst there are certain key risks for Eidos shareholders in accepting the SCi offer, the current implied value of the SCi offer... represents a significant premium to Elevation’s offer.”

“Taking these factors into consideration, the Board, who has been advised by UBS Investment Bank, its financial adviser, considers that the terms of the SCi offer are fair and reasonable. Accordingly, the Board unanimously recommends to Eidos shareholders that they accept the SCi offer.”

A final problem faced by the company, though, is that by changing its recommendation, Eidos most now pay a £700,000 ($1.3m) break fee to Elevation, if Eidos is indeed acquired by SCi instead.

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