April 30, 2008 // 6:02 pm
- French-based publisher Infogrames today announced that it has formed a definitive pact with Atari to merge. Reached to the tune of $11 million dollars, the agreement gives Infogrames complete control over Atari.
"Bringing Atari US and Infogrames businesses together will enable us to create a simplified global structure for our business as we seek to re-build a well-managed, cohesive and financially disciplined company," said Infogrames CEO David Gardner
"This is a key strategic event for Infogrames that will benefit all of our shareholders. I believe that this transaction will generate significant benefits for the Group," he added.
As part of the deal, Infogrames has agreed to lend Atart $20 million in funding to cover capital requirements. The publisher expects to close and seal the merger deal in the third quarter of 2008.
Press Release: Infogrames Entertainment S.A. and Atari, Inc. Announce Agreement to Merge
LYON, France and NEW YORK, April 30 – Infogrames Entertainment S.A. ("Infogrames" or "the Group") and Atari, Inc. (Nasdaq: ATAR) ("Atari") today announced that they have reached a definitive agreement to merge.
- brings to a close a period of financial underperformance for Atari;
- strengthens Atari under Infogrames' new management team;
- delivers a platform for future growth in the US; and
- offers Atari shareholders an all cash exit.
Under the terms of the merger agreement, Infogrames will acquire the remaining outstanding equity interests of Atari (other than shares of common stock held by Infogrames or its affiliates, which would be cancelled) for US$1.68 per share, equivalent to a cash payment of approximately US$11 million. Infogrames is currently the majority shareholder in Atari holding approximately 51.4%. Following the merger, Atari will be a wholly- owned subsidiary of Infogrames. The merger will be funded by Infogrames from existing cash resources. The transaction is not subject to any financing conditions and is expected to close in the third calendar quarter of 2008.
This agreement is an essential and positive development for Infogrames and its shareholders. It brings Atari fully under the control of Infogrames, delivering a platform for future growth in the US. This step closely follows a series of recent major restructuring actions implemented in an effort to reposition Atari, streamline its corporate structure and reduce its annualized costs, including costs related to being a US public company.
The Board of Infogrames believes that full ownership of a restructured Atari is an important step for the Group, leading to a simplified operating structure that will deliver greater efficiency, provide the Group with greater opportunities to expand its US distribution capabilities and strengthen its platform for its global online initiatives.
Commenting on today's announcement, David Gardner, CEO, Infogrames, said:
"Bringing Atari US and Infogrames businesses together will enable us to create a simplified global structure for our business as we seek to re-build a well-managed, cohesive and financially disciplined company. This is a key strategic event for Infogrames that will benefit all of our shareholders. I believe that this transaction will generate significant benefits for the Group."
The management of Atari, Inc., led by recently appointed President and CEO, Jim Wilson, will join the Group upon the closing of the transaction and remain focused on growing the key North American gaming market.
Mr. Wilson said:
"By joining Infogrames, we will have the opportunity to further transform Atari. As part of this newly integrated company, we will be better able to streamline operations and have a stronger platform for growth in North America."
The transaction was negotiated and approved by the Special Committee of the Board of Directors of Atari, consisting entirely of directors who are independent of Infogrames. In approving and recommending the merger transaction, the Special Committee considered, among other things, the terms of the merger agreement, which permits the Special Committee to terminate the agreement under certain circumstances, Atari's financial position and results of operations, general market and industry conditions, the risks of implementing Atari's business plan, Atari's limited liquidity and the limited range of options available to Atari. The Special Committee also considered the effects of Infogrames' controlling interest, the risk that the transaction will not be completed, the premium to Atari's share price 30 days prior to the date of Infogrames' offer, and the willingness of Infogrames to extend a loan of up to $20 million to Atari to cover expected capital requirements.
The transaction is subject to a number of customary conditions, including the approval of the holders of a majority of outstanding shares. Atari expects to call a special meeting of shareholders to consider the merger in the third quarter of calendar 2008. Since Infogrames controls a majority of Atari's outstanding shares, Infogrames has the power to approve the transaction without the approval of Atari's other shareholders.
In connection with the transaction, Infogrames has committed to lend Atari US$20 million, subject to the terms and conditions of the credit agreement between Atari and Infogrames. This loan will be used to fund Atari's operational cash requirements during the period between the date of the merger agreement and its closing.