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Midway, SCi Begin Merger Talks

| 3 Jan 2008 18:04
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Merger talks between Midway and Eidos parent company SCi have begun again, after "very preliminary" talks three to four years ago failed to produce any results.

This time, however, Midway's stock price is much lower than it was back then, currently trading at $2.54 as of yesterday, compared with roughly $20 at the time of the earlier stocks. But industry analyst Michael Pachter, speaking in a Next-Gen report, said both companies are relatively weak, although he added a merger was "feasible." Pachter indicated a joining of the two companies would produce relatively slight benefits compared to the recent blockbuster merger between Activision and Vivendi, saying, "In this case, one plus one could equal a 2.2 or 2.5."

Pachter also said a merger would allow the companies to focus on their known strengths while avoiding "more dubious projects," which would help maximize revenues. Midway's most visible franchises include Mortal Kombat and Unreal Tournament, while SCi is best known for its Eidos titles including Hitman and Tomb Raider. A merger could also help both companies work more effectively in the global marketplace, according to Pachter, with Midway taking advantage of SCi's European strength while SCi could benefit from Midway's North American brand recognition.

Neither Midway nor Eidos would comment on the rumor.

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