The company submitted a proposal for the takeover to the Tecmo board of directors today, seeking their consent for the takeover bid. The conditions of the proposal must be consented to by September 4, and should the Tecmo board fail to respond or not give consent by that date, the planned friendly takeover as outlined in the proposal will not take place.
"Videogames have been globally recognized as a major entertainment genre, and have now become an industry receiving considerable attention in terms of market size and growth potential. In the meantime, the game industry in Japan is standing at a critical juncture whether it continues to be a center of the videogame industry in the world, or not," Square Enix said in a statement.
But citing the recent, well-cataloged troubles at Tecmo as a major factor in the decision to offer the acquisition, the statement continued, "Tecmo is a group of excellent creators with proven track-record in the global market, which is a precious human resource of Japan. We, however, cannot be optimistic about the future of this significant resource, given the current circumstances surrounding Tecmo. We believe that Tecmo will be able to make a great leap forward by joining the Square Enix Group, which will provide the group with further growth opportunities as well."
Square Enix is seeking more than half of the outstanding shares in Tecmo, although it has placed no upper limit on the amount it wishes to acquire, and is offering $8.46 per share, a 30 percent premium over the August 28 closing price of $6.49 per share.
Tecmo has been beset by internal difficulties in recent months, including the departure of Team Ninja head Tomonobu Itagaki and his subsequent lawsuit against the company, as well as lawsuits alleging shady payment practices filed by other employees and the sudden resignation of president Yoshimi Yasuda, who was secretly recorded making statements supporting the allegations of Itagaki and others. The company has not yet responded to the proposal, and whether Square Enix will walk away quietly from the deal if Tecmo declines their offer, or pursue it more aggressively, remains to be seen.