Ubisoft eyes Lara Croft to fight raider

UBISOFT, Europe's third-largest video games publisher, may buy British rival Eidos as a defence plan against games giant Electronic Arts, which recently acquired a 20% stake.

'We are still interested in this company [Eidos],' chairman and chief executive Yves Guillemot said. 'Short-term, we are more focused on analysing how to organise in the face of recent events rather than on buying Eidos.

'That said, this is a defence option we have not yet ruled out. We are discussing with many [potential] partners to find the best possible solution for the company.'

Guillemot, who founded Ubisoft with his brother, said the French company was not itself on the market. 'Ubisoft as an independent entity has succeeded in creating lots of value and has all the assets to continue to be a leader,' he said.

He admitted he had had talks Electronic Arts, the world's largest games maker, but still did not have a clear idea of its intentions. He added that he was in talks with other investors to shore up the company's defences. 'In fact, we are discussing with French institutionaland other investors here and there to keep our independence,' he said.

With its purchase of a 19.9% stake just before Christmas, EA is now Ubisoft's biggest shareholder, outstripping the Guillemot brothers who together own 17.5%. However, the brothers still control 22.8% of the voting rights compared with EA's 18.4%.

Ubisoft is bullish on its profit outlook, saying that the launch of two potential hits - Tom Clancy's action game Splinter Cell and Brothers in Arms Road to Hill 30 - should push fourth-quarter sales over €220m (£152m) and confirmed its full-year operating profit target of between €40m and €45m. EA insists its intentions are not hostile.

'We had the opportunity to buy a 20% stake in Ubisoft and we haven't asked for anything ... that's not hostile. In our industry, one doesn't make hostile moves because our value lies with people,' said the US company's Europe chief, Gerhard Florin.

The video games industry is ripe for consolidation with rising production and marketing costs demanding economies of scale. Eidos, Britain's largest independent video games company and creator of the Lara Croft - Tomb Raider video games franchise, has been struggling in its key market, the US. It had a net loss of £2.9 million last year on sales down almost 12% at £133.9m.

While Ubisoft has always been a major contender to pick up Eidos, that sale is far from certain. Eidos says it had received expressions of interest from a number of companies.