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Eidos deal is good for Square Enix, says Pachter

Wedbush Morgan analyst believes franchise combination will work well

Wedbush senior analyst Michael Pachter has told GamesIndustry.biz that he thinks the bid to acquire Eidos for GBP 83.4 million is a good one for Square Enix, and the UK publisher's franchises will play a key role in the overall strategy moving forwards.

"Square Enix doesn't really have a large Western presence, with blockbusters in the Final Fantasy series, Kingdom Hearts, Dragon Quest, and Star Ocean, but not many 'Western-style' games," he said. "A combination with Eidos gives them a large number of Western-style franchises, with Tomb Raider, Hitman, Championship Manager, potentially Deus Ex.

"The total cost is relatively small, essentially the cost of buying a middle of the road developer, so I would say it's a good deal for Square Enix. My view is that they are buying the company for the existing franchises, so I wouldn't expect to see any of them killed off."

"Broader is better, in my view, so a combination should make Square Enix stronger," he added.

The deal has also been popular with investors, with Eidos' share price jumping 127 per cent throughout today to bridge the gap between yesterday's level and the Square Enix bid, and though it's yet to be approved by shareholders, Pachter doesn't see any real reason why it should be blocked.

"It's hard to know what the company is worth, but shareholders are being offered a premium to the most recent stock price, so most will probably believe that the deal is fair," he said.

The bid was officially lodged on January 14 and could bring to an end a long period of uncertainty for the Tomb Raider publisher, going all the way back to September 2007.