Elevation Partners withdraws its offer for Eidos

US private equity firm Elevation Partners has formally withdrawn its cash offer for Wimbledon-based publisher Eidos, leaving the way clear for SCi's strongly supported acquisition bid to proceed.

The company, which is headed up by former EA president John Riccitiello and boasts managing partners including Irish rock star Bono, announced its decision to pull out of the running in a statement this morning.

Elevation's bid for Eidos was an all-cash offer of 50 pence per Eidos share, and was originally recommended by the Eidos board - but it was trumped by a bid from rival British firm SCi which offered one new SCi (SEG.L) share for every six Eidos (EID.L) shares held, giving a significantly higher valuation to the company.

"The directors of EM Holding note the strong support from Eidos' shareholders that the SCi offer has received," today's statement commented, "and would like to wish Eidos and its stakeholders well under the proposed stewardship of SCi."

It's quite a change of tune from what Elevation was saying just a few weeks ago, when it launched a savage attack on the SCi bid - stating publicly that the firm has "little experience" of running a large publishing business and warning that the bid carries significant risks for Eidos' shareholders.

With Elevation now leaving the race, SCi remains the only firm with an offer on the table for Eidos, and it's generally expected that the acquisition will be ratified by a shareholder EGM on May 13th.

SCi has strongly indicated that it plans to undertake a heavy restructuring effort following the acquisition, with much of Eidos' top management expected to be pushed out and the studio structure likely to move over to the "wholly owned contractor" model which SCi has successfully implemented with Bath-based Pivotal Games, creators of the Conflict series.