Bono in takeover lifeline for computer games firm
Computer games maker Eidos received a financial lifeline today after a private equity firm featuring rock icon Bono struck a £71m (€102.4m) takeover deal.
Bono is one of six directors of US group Elevation Partners, which has agreed a 50p-a-share offer to acquire London-based Eidos.
The deal ends a takeover saga lasting more than eight months and ensures Eidos will receive £23m (€33m) in short-term funds from its lenders to continue trading.
Eidos – best known for creating cyber-babe Lara Croft – has been searching for a buyer after poor sales of a number of games and delays to key titles drove it deeply into the red.
The company last week revealed its cash reserves had plunged to £11.8m (€17m) during the final six months of 2004 and pre-tax losses totalled £29m (€41.8m). Uncertainty over its future led to a number of key members of staff quitting in recent months.
Elevation Partners was formed last year to invest in the media and entertainment industries using $1bn (€758m/£520 million) 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”.
“This will enable the company to develop games on a schedule which permits maximum creative flexibility,” it said.
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.
