Bonnell denies Infogrames takeover reports
Infogrames CEO Bruno Bonnell has denied rumours that the company is currently the target of a takeover bid, shortly after the Atari parent company announced a new deal with its bankers which will help it through Christmas.
Infogrames CEO Bruno Bonnell has denied rumours that the company is currently the target of a takeover bid, shortly after the Atari parent company announced a new deal with its bankers which will help it through Christmas.
"Infogrames is not involved in any discussions regarding a friendly or hostile bid on the company," Bonnell told news agency Reuters, ending several days of speculation over the possibility which had driven the company's share price up by over 10 per cent.
While the company is expected to meet its financial guidance when it announces its second quarter results on November 5th - with sales of 95 to 105 million Euro - fears over its ability to manage its significant debts have resurfaced among investors.
Infogrames, which is the parent company of US publisher Atari Inc, needs to repay around 117 million Euro of convertible bonds next year. According to Bonnell, the firm is working on a refinancing plan for these bonds, but has no firm news in this area as yet.
However, the company has announced that a new deal with its bankers has been struck, which will help to fund future operations - most notably over the Christmas period - and that it has redeemed $26.1 million of the $28.2 million owed to Nexgen Capital Limited in exchange for transferring 10.6 million shares in Atari Inc.
Concerns over the 117 million Euro convertible bond have weighed heavily on Infogrames' share price this year, and are likely to continue to do so until the company announces a refinancing plan to deal with the looming problem. It pledged on Friday that it is "reviewing all possible solutions to improve its financial structure," according to Reuters.
Even before Bonnell's denial, the rumoured buyout was seen as a remote possibility by many industry pundits. Unlike British publisher Eidos, which is currently in talks with a number of potential bidders over a sale of the company, Infogrames is heavily debt-burdened, making it into an unattractive option for even the largest publishers such as Electronic Arts.