The acquisition hunger that afflicts game publishers has apparently extended to ye olde Europe. Infogrames recently acknowledged that the company made a buyout bid for SCi. This revelation comes on the heels of SCi’s announcement that the U.K.-based company has received an influx of capital from Warner Bros.
Much of the usual posturing by companies trying to eat up other companies was absent in Infogrames’ comment:
The board of directors at SCi, though, “declined, at this stage, to entertain Infogrames’ offer.” The company goes on to say that it is “financially disciplined and recognises the strengths of both companies.”
By no means is this rejection the last we will hear of the proposal as Infogrames still appears optimistic about SCi eventually seeing the wisdom of its offer:
The company also noted that it “has sufficient resources to satisfy the cash element of its indicative offer and has secured commitments in relation to the potential working capital requirements of the enlarged group,” and adds that “Importantly, Infogrames is in a position to move expeditiously with its proposal.”
Now, SCi may be reluctant to undergo what will certainly be a painful merger process particularly in the light of their influx of cash from Warner Bros.:
In a new release, though, SCi says the deal with Warner Bros., including the sale of some £15 million ($29.8m) worth of shares, will give the publisher “substantial cash balances in addition to its new committed £25 million ($49.7m) debt facility,” and will include a ’strategic distribution agreement’ helping the company drive growth in the U.S., Canada and Mexico.
In addition to the cash bonus, Warner Bros. will be able to offer better distribution through its own considerable network. For Warner Bros., this is another step toward becoming a player in the video game industry:
Added Warner Bros. Home Entertainment president Kevin Tsujihara, “This investment underscores Warner Bros’ commitment to becoming a major presence in the video game business, With SCi’s new management team in place along with their track record of rich franchises like Tomb Raider, Hitman and Deus Ex we believe we have formed an exciting partnership and a powerful engine for growth.”
Warner Bros. already owned 10.3% of the company, and this investment increases the stake to 35%. With the debate raging over the impact of the video game industry on Hollywood, this is one intelligent way for movie companies to mitigate the possible impact.
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