World War III

Biohazzard56 · 2005-01-05, 06:32 PM

Game Maker Ubisoft Soars as Bidding War Looms
Wed Jan 5, 2005 08:06 AM ET

Ubisoft, which has said it considered EA's move hostile until it got more information from EA, is said to be already working on a defense.

Bruno Bonnel, Chief Executive of Infogrames (IFOE.PA: Quote, Profile, Research) , told Reuters in a phone interview on Tuesday that Europe's largest video games maker could be ready to play a role in Ubisoft's defense to help prevent a U.S. company from increasing its position in Europe.

"It's the theme of the so-called French touch ending in U.S. hands," one analyst said.

But analysts and traders say cash-strapped Infogrames was not well placed to help Ubisoft fend off a bid from EA.

On the other hand, analysts said Vivendi Universal, which has sharply reduced its debts, would have enough cash to fund a friendly bid.

"People think that Vivendi could afford to buy Ubisoft and that there would be an industrial logic to it," one Paris-based trader said.

Vivendi has tried in vain to sell its loss-making Vivendi Universal Games in recent years.

Vivendi's games business had an operating loss of 185 million euros on sales of 211 million for the first nine months of 2004. It notably owns the Blizzard Entertainment studio, whose hits include the Warcraft strategy game, which would be a good fit in Ubisoft's action games portfolio.

Ubisoft founders, the Guillemot brothers, together own 17.5 percent of the company and 22.8 percent of its voting rights, while EA now controls 18.4 percent of the voting rights.

But with a market capitalization of $18 billion, sales of $2.9 billion and cash of $2.5 billion, EA could easily afford Ubisoft, which has a market value of about 375 million euros, analysts said.

http://www.reuters.com/newsArticle.j...2&pageNumber=1