A BIDDING war has broken out in a battle for control of troubled computer and video game maker Eidos, known for its Tomb Raider series featuring cyber-heroine Lara Croft.
SCI Entertainment trumped an earlier 71 million agreed takeover of Eidos by Elevation Partners, which counts U2 rock star Bono among its partners, with a 76m counter offer.
Eidos said in a statement it would consider SCI’s bid along with the recommended offer from Elevation and make a further announcement in due course. Elevation declined to comment on the SCI offer.
SCI said acquiring Eidos would enhance earnings in the first full year of ownership. SCI Chief Executive Jane Cavanagh said Eidos’s recent financial woes had "not done justice" to the strength of its brand name.
A takeover will give struggling Eidos the short-term working capital it needs to remain in business, while at the same time ending a ten-month search for a buyer.
Poor sales for a number of its games as well as delays to key titles, such as Championship Manager 5, hurt Eidos and drove it into the red. That led to it seeking a buyer to keep it trading.
Last week the company said its cash reserves had plunged to 11.8m during the final six months of 2004 and pre-tax losses amounted to 29m.
The uncertainty about its future has seen a number of staff quit in recent months.
Earlier this month, the company warned that it needed a formal takeover offer to be made by Good Friday to satisfy the terms of a new 23m loan from the Royal Bank of Scotland.
Elevation Partners was set up last year specifically to invest in the media and entertainment industries using 520m of committed capital.
Justifying its decision to mount a takeover, the US group said it would free Eidos from "the burden of half-yearly reporting". It added: "This will enable the company to develop games on a schedule which permits maximum creative flexibility."
Elevation said most of the titles that were being developed by the company would be delayed to ensure that happened. It follows the decision by Eidos to hold back new games in the top-selling Hitman and Tomb Raider series until 2006.
Eidos said it wanted to be taken private because it needed to invest heavily in research and development ahead of the launch of new hardware.
At the same time, the company said it was too small to stay independent and its results hinged on the performance of a handful of key titles, such as Hitman and Championship Manager.