(11-27-2004) U2 Star Bono Favorite to Get His Hands on Lara Croft -- Scotsman.com - U2 Feedback

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Old 11-27-2004, 06:24 PM   #1
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(11-27-2004) U2 Star Bono Favorite to Get His Hands on Lara Croft -- Scotsman.com

U2 Star Bono Favorite to Get His Hands on Lara Croft


IT COULD be one of the most glamorous partnerships in the world of entertainment: Bono, lead singer of U2, is sizing up the owner of Lara Croft, the busty computer games heroine.

Troubled computer games publisher Eidos, which owns the Tomb Raider title, put itself on the block last summer after a series of profit warnings and delayed games launches.

Sources say chief executive Mike McGarvey is keen to stage a management buyout, and has been talking to two venture capital funds.

It was known that he was in talks with a third party, but it was assumed that would involve a sale.

The front-runner for the MBO is believed to be Elevation Partners, based in America’s Silicon Valley, in which Bono, whose real name is Paul David Hewson, became managing director in June.

Elevation was established by Roger McNamee, a technology investor, and John Riccitiello, a former president of American computer games giant Electronics Arts, to invest $1bn into media and entertainment companies.

Eidos, which was a stock market darling with a £1bn market value at its peak, sank to £115m on Friday and is thought to be on sale at around £150m.

It has five main games series including Championship Manager and its action adventure series. But it has gone through a bad spell and in June announced a strategic review to examine its options.

At its annual meeting last week, it confirmed it was conducting due diligence with a small number of potential acquirers, but would not be drawn on details.

It said that it aimed to conclude talks on the sale of the company "as soon as possible" but gave no assurances that an offer would be forthcoming.

Eidos is Britain’s biggest computer games publisher and let down the City in the summer, reporting "disappointing" full-year losses.

It took a £2m hit for the year, compared with £17.4m profits the previous year. Sales also fell from £169m to £150m.

It was then that it basically announced ‘game over’, admitting that it lacked the size to absorb poor sales of key titles.

But its central problem has been delays in bringing its games to market.

Christmas is a vital time to launch new products and it has shot itself in the foot this season by letting Championship Manager 5, one of its best selling titles, slip into the New Year.

In the past few months, Eidos has held takeover talks with America’s Electronic Arts and THQ, and France’s Ubisoft. But these have come to nothing.

One analyst says: "The problem is that the value lies in its best brands which are Tomb Raider, Hitman and Championship Manager.

"But the only way for a bidder to extract any value would be to invest millions in bringing each title to market and completing development."

If the current management buyout negotiations with Bono’s Elevation Partners come off, the two companies would be an excellent fit.

Elevation was set up to exploit the intellectual property assets of the companies with which it partners. It is keen to stage buyouts but will also sink capital into distressed public companies.

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