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SCi Rejects Acquisition Offer

| 24 Apr 2008 14:23
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The saga of the other big videogame publisher facing acquisition continued today, as SCi Entertainment Group rejected a third-party offer as not being in the best interests of the company and its shareholders.

The publisher confirmed today that it had received "an indicative proposal from a third party relating to a possible offer for the Company at a significant premium to the Company's current share price." The offer consisted of mostly equity consideration, but would also have placed responsibility for SCi's funding requirements in the hands of the unnamed third party, which SCi management felt could add unacceptable delays to the company's budgetary needs.

"The Board considers, amongst other things, that the proposal does not represent sufficient value and that, given the Group's significant short to medium-term funding requirements, the pursuit of an uncertain takeover proposal with consequent delay and risks to the Company's proposed issuance of new equity to fund the execution of its revised strategic plan would not be in the best interests of the Company or its shareholders," a statement issued by SCi said. "According, the Company is not pursuing discussions in relation to this proposal and the proposed equity fundraising remains the Company's priority at this time."

Turmoil at the troubled publisher came to a head in January, when SCi management ended takeover talks which had been ongoing since September 2007, sending the company's share price plummeting to less than 50 percent of its previous day value. Soon after, SCi CEO Jane Cavanagh was forced out of the company, along with Managing Director of Publishing Bill Ennis and Managing Director of Studios Rob Murphy, and in February, new CEO Phil Rogers announced a major restructuring of the company, including the cancellation of 14 ongoing projects, a 25 percent staff cut and relocation of its production services.

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