EID Eidos

RNS Number:4339K
Elevation Partners, L.P.
31 March 2005


                                                                 31st March 2005

   EM Holding highlights to Eidos shareholders risks in SCi's all paper offer

EM Holding Corp. ("EM Holding") believes that the paper offer by SCi
Entertainment Group Plc ("SCi") for Eidos PLC ("Eidos") carries significant
share price risk for investors.

John Riccitiello, Director of EM Holding, commented:

"Eidos shareholders should not underestimate the demands of, and risk involved
with, combining Eidos with SCi. While SCi is a successful company, it has little
experience of integrating larger businesses, of running a major international
video games company or in managing significant intellectual properties.

By contrast, EM Holding's cash offer provides certainty for Eidos shareholders."

EM Holding would make the following observations about the SCi paper offer:

   *The value of SCi's paper offer

The value of SCi's paper offer is based on a SCi share price which has risen
sharply over the past six months.

        *SCi's share price on 21 March 2005 (the day prior to SCi's
        announcement of its offer) was 321.5 pence, near its then 52-week high
        price of 345.0 pence, and 244% above its then 52-week low price of 93.5
        pence;
        *Based on the average SCi share price over the 90 trading days ended
        21 March 2005, the implied value of SCi's offer would be 44.1 penceper
        Eidos share;
        *Based on the average SCi share price over the 180 trading days ended
        21 March 2005, the implied value of SCi's offer would be 31.8 penceper
        Eidos share.

EM Holding's offer provides shareholders with the certainty of 50 pencein cash
per Eidos share.

   *Undercapitalisation and cash flow risks

SCi proposes to raise only approximately #60.1 million (before expenses) to
provide funds for the enlarged group.

The Board of Eidos has highlighted the financial challenges that Eidos faces. In
the 12 months to 31 December 2004 Eidos made a pre tax loss of #38.5 million. In
the same period Eidos' cash balance decreased by #46.3 million. In addition,
Eidos' financial situation has progressively deteriorated as evidenced by the
table below:

(# in millions)           6 months ended      6 months ended   6 months ended
                        31 December 2003    30 June 2004     31 December 2004
Group Turnover - cont.
ops.                                #78.7            #55.2               #31.5
Pre tax profit (loss)                #7.8            (#9.8)             (#28.7)
Cash balance increase
(decrease)                          (#0.2)          (#20.7)             (#25.6)


Separately, Eidos will have to repay up to #23.0 million due under a facility to
Royal Bank of Scotland by 30 June 2005 at the latest. SCi also expects to incur
a #7.0 million cost in the current financial year in order to achieve its
synergy target.

   * Eidos is a significantly bigger business than SCi

Eidos is a larger business with sales of #133.9 million (for Eidos' financial
year ended 30 June 2004) employing 696 people worldwide. On this basis SCi is
less than a quarter of the size of Eidos: SCi had sales of #31.0 million (for
SCi's financial year ended 30 September 2004) and 139 employees.

Eidos is a global business with studio operations in the UK, Denmark, Spain and
the USA and a publishing presence in UK, US, France, Spain, Germany, Japan and
Australia. Currently SCi's sole studio is located in the UK.

In its last financial year SCi released only five new titles; compared with
Eidos which released 14 titles with six titles selling over 500,000 units.

   *SCi's track record

SCi has a limited track record of integrating acquisitions. SCi acquired the
Pivotal business for #2.4 million in 2003 - and it continues to operate Pivotal
as an independent company with a separate management team.

SCi has recognised the need to revive Eidos' brands. However, SCi's development
track record is limited to a single major franchise and it does not have a
history of publishing highly rated games.

        *The average Metacritic rating of SCi's games is 63 out of a possible
        100.
        *SCi has had only one game with a Metacritic rating of 75 or above.
        Eidos has had 39 games with a Metacritic rating of 75 or above.


   *Conclusion

EM Holding's cash offer has no share price or integration risks and offers Eidos
shareholders 50 pence in cash with absolute certainty.

                                    - ENDS -


Enquiries:

Smithfield Consultants
John Antcliffe
John Kiely +44 (0) 20 7360 4900

This announcement is not for release, publication or distribution in whole or in
part in or into Canada, Australia or Japan. This announcement does not
constitute an offer or invitation to purchase any securities or the solicitation
of any vote for approval in any jurisdiction.
The Directors of EM Holding accept responsibility for the information contained
in this announcement. To the best of the knowledge and belief of the Directors
of EM Holding (who have taken all reasonable care to ensure that such is the
case), the information contained in this announcement is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
Lehman Brothers Europe Limited, which is regulated in the United Kingdom by the
Financial Services Authority, is acting for EM Holding and no one else in
connection with the offer by EM Holding and will not be responsible to anyone
other than EM Holding for providing the protections afforded to clients of
Lehman Brothers Europe Limited or for providing advice in connection with such
offer.

                                   APPENDIX 1
                        SOURCES AND BASES OF INFORMATION

1. General

Unless otherwise stated, financial information relating to Eidos has been
extracted from the published audited Annual Report and Accounts of Eidos for the
financial year ended 30 June 2004, published interim results for the six months
ended 31 December 2004 and/or public statements made by Eidos.
Unless otherwise stated, financial information relating to the SCi Entertainment
Group ("SCi") has been extracted from the audited Annual Report and Accounts of
SCi for the financial year ended 30 September 2004. Merger benefit estimates
relating to SCi's proposed offer for Eidos have been extracted from SCi's RNS
announcement of 22 March 2005.

Employee numbers for Eidos and SCi are sourced from the respective 2004 Annual
Reports and Accounts for such entities.
Other general information relating to SCi has been sourced from SCi's corporate
website at www.sci.co.uk/corporate.

2. Share Prices

The prices of shares on a particular date and average prices for a particular
period are closing-mid prices sourced or derived from the FactSet Consulting
Services or the Financial Times.

3. Metacritic Ratings

The Metacritic ratings (or "Metascores") assigned to games published by both SCi
and Eidos are derived from data sourced from the Metacritic website, at
www.metacritic.com.

A Metascore is a weighted average of up to 30 reviews from national critics and
publications for a given game.

Each release of a game on a particular platform is assigned a distinct
Metacritic rating - references to "games" may accordingly include variants of
the same title published on different platforms.


Metascores for games range from 0-100, with higher scores indicating better
overall reviews and lower scores indicating less favourable reviews from
critics. Scores ranging 90-100 represent "Universal Acclaim", 75-89 represent
"Generally Favourable Reviews", 50-74 represent "Mixed or Average Reviews",
20-49 represent "Generally Unfavourable Reviews" and 0-19 represent
"Overwhelming Dislike".

A Metascore is considered a weighted average because more significance, or
weight, is assigned to some critics and publications than to others, based on
the overall stature and quality of those critics and publications.

Metascores are not calculated for items that do not have a minimum number of
reviews. These items are marked "score pending" or "XX".

Metacritic cover virtually every new game released in the United States (as well
as a few released in the UK only), as long as that game is reviewed by multiple
publications.

Average Metacritic ratings of games published by any entity have been calculated
based on all games which have been published by that entity for which a
Metascore is currently available.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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