NEWS - Thursday, February 27, 2003
Microsoft, EA Bid for Sega
Microsoft, EA Mull Bid for Sega TOKYO (Reuters) - Microsoft Corp and Electronic Arts Inc are separately exploring the possibility of buying all or part of Japanese videogame maker Sega Corp, the Asian Wall Street Journal said on Friday. The paper, quoting people familiar with the situation, said the two U.S. companies have yet to hold formal talks with Sega and that no deal was imminent. The news sparked a buying spree in Sega shares, boosting the stock price by 13.91 percent to 729 yen by 8:17 p.m. EST Thursday. Sega said earlier this month that it would merge with pinball-style ’pachinko’ game machine maker Sammy Corp, abandoning plans to restructure on its own and turning to financially sound Sammy for help. The paper said either U.S. company could emerge as Sega’s White Knight, pulling the company away from a merger plan that appears rife with difficulties and internal opposition. Microsoft has asked at least one U.S. investment bank to investigate ways it could buy all or part of Sega, while EA in recent weeks has approached Japanese game makers about launching a joint bid for Sega, the paper said. Acquiring Sega could give Microsoft a strong boost in Japan, where a dearth of Xbox games that appeal to Japanese consumers has left a vast stock of unsold consoles. A deal could also give EA a boost in Japan and remove a competitor, the paper said. Sega, which reduced its 2002/03 net profit forecast by 90 percent early this month, is expected to announce, as early as on Friday, a reorganization of its U.S. operations that will shed 20 percent of its work force of 450, the paper also said, quoting people familiar with the plan. The cuts are part of a global restructuring that could lead to additional layoffs around the world, the paper said. Sega was not immediately available for comment. A spokesman for Microsoft’s Japanese subsidiary declined to comment on the report, but said that U.S. company chairman Bill Gates, who visited Tokyo earlier this week, had not met with Sega representatives.Source: http://www.reuters.com
