The end seems to be in sight for the takeover drama at UK publisher Eidos, with the company's board this morning announcing that it is recommending the offer from British firm SCi to shareholders.
The board is advising shareholders to opt for the SCi bid, which offers one new SCi share for every six Eidos shares held, a nominal value of almost 73 pence, in favour of a rival bid from US private equity firm Elevation Partners, which has offered 50 pence per share in cash.
Earlier this week, Eidos advised shareholders to do nothing while it considered both offers - a move widely believed to have been a delaying tactic to give Elevation more time to decide whether it wished to increase its cash offer.
However, Elevation's only response to the higher SCi bid has been a statement from managing partner John Riccitiello - formerly president of Electronic Arts - attacking the offer for being too risky, and claiming that SCi doesn't have the experience required to turn Eidos around.
Prior to the Eidos statement this morning - which does point out that there are certain risks inherent in SCi's bid, and advises shareholders unhappy with those risks to sell their shares on the open market - almost 41 per cent of Eidos' stock was already irrevocably committed to the SCi offer, thanks to agreements with a number of large institutional investors.
"The Board, who has been so advised by UBS Investment Bank ('UBS'), its financial adviser, consider that the terms of the SCi Offer are fair and reasonable," the statement reads. "Accordingly, the Board unanimously recommends to Eidos shareholders that they accept the SCi Offer."
SCi is expected to significantly restructure Eidos if its bid is successful, with the studio system to be remodelled along the lines of SCi's wholly-owned contractor system, which has been used to great success with Conflict series developer Pivotal Games.
However, the now almost certain victory of SCi will come at a cost - Eidos, which previously recommended the Elevation bid to shareholders, is bound to pay a £700,000 break fee to the US firm in the eventuality of that bid failing to result in an acquisition.
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