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Is Eidos up to its old tricks again?

By on October 28, 2008

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.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: