Is Eidos up to its old tricks again?

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Yesterday, Eidos altered its standstill agreement with Warner Bros. The agreement, put in place at the time of the April fundraising, stopped Warner from raising its stake in Eidos without permission.

Warner is now able to raise its stake to up to 30% before December 1st. 30% is the amount that would trigger a requirement for a full takeover under London Stock Exchange Rules. The significance of the 1st December date eludes me: it is possible that this was the termination date of the original standstill agreement, so Eidos has simply waived the restrictions, but left the agreement in place.

Warner told the Financial Times: “At this point there is no immediate plan to increase our share.”

So Eidos removes a restriction on a buyer, which only seems to apply for 2 months, and said buyer promptly says it has no plans to buy. The shares rise a little anyway: a rise of 2p to 20p.

It might be an important part of a complex deal, but this feels like old Eidos to me: “Share price in the doldrums? Let’s make the market think a takeover is imminent.” The market hasn’t exactly grabbed the story, but it has brought Eidos back into the market’s mind. We’ll see if there is any substance to this story.

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