EIDOS, the company behind Tomb Raider, has been toppled as Britain’s biggest computer games company by SCi Entertainment, which has become the subject of a buying spree by hedge funds.
Takeover speculation is gripping the £20 billion global computer games industry and has sent SCi’s market value up by more than 200 per cent to £93 million at yesterday’s close. Shares in Eidos, however, have fallen by nearly 50 per cent to value the company at £92 million.
The SCi buying spree has been driven by Cantor Fitzgerald, which has amassed an 11.7 per cent stake in the company since October to become its second-largest shareholder behind Jane Cavanagh, the chief executive. This month, Man Financial, a hedge fund operator, revealed that it had built a 6.3 per cent stake in the company.
The change in ranking of the games companies has also been driven by Eidos’s failure to find a buyer, having effectively put itself up for sale last year after a series of profit warnings. The company was rumoured to be the subject of a bid from UbiSoft, the French company, which said last month that it might still consider making an offer.
UbiSoft is also at the centre of speculation that it might be taken over by Electronic Arts (EA), after the world’s biggest video games company took a near 20 per cent stake. But UbiSoft is intent on remaining independent and may use a bid for Eidos to fend off EA.
Advertisement
Cantor is rumoured to be dealing in SCi on behalf of Robert Bonnier, the entrepreneur and former chief executive of Scoot.com. Mr Bonnier may have built up the shareholding via contracts for differences, derivatives that give him exposure without outright ownership.
One banking source said that SCi was now a bigger takeover target than Eidos because of its stronger portfolio of games and its highly regarded management team.
The company’s titles include Overdose, a computer game focused on the drug war over the Mexico-US border, and Constantine, an action game tied to the new film of the same name, starring Keanu Reeves and Rachel Weisz.
Takeover speculation has also been fuelled by media conglomerates such as Disney and Viacom showing increased interest in the sector in recent months. Games have emerged as a lucrative method of exploiting the intellectual property of Hollywood films.