Scidos - SCi are the UK's No1 (Excl. DN)

I think that a lot will depend, from the former Eidos shareholders' point of view, on whether stock is offered as part of the deal. My understnding was that most of the Eidos institutional shareholders could not take foreign shares, which was one of the reasons the Infogrammes offer was rejected 5 years ago. If that situation has changed, then I think the majority of former Eidos holders will be looking for a stock element, which is a fundamental reason why the SCi bid won out.

Most of the institutions, such as Schroders, bought Eidos at breakeven levels equivalent to around £9+ for their SCi stock. Unless they get an all cash offer in that region (highly unlikely) they will need an element of shares to allow them the possibility of reducing their losses (a strategy which has worked very well with SCi so far).

If the Daily Mail story is correct, it sounds as if SCi have sounded out their former Eidos shareholders, who make up around one-third of the share base, and taken their concerns on board. A £600M deal may sound a little on the high side, but bear in mind that Jamdat went for £400M with revenues a fraction of SCi's and a lot of "potential" built in to the offer. In that context, an offer of £600M does not sound unreasonable, especially if the bidder can mitigate their risk by offering a large element of stock.

However you look at it, things are looking up!