Silverstar buys Empire in deal worth £4.75 million

Investment specialist Silverstar has acquired London-based videogames publisher Empire Interactive in a deal worth an estimated GBP 4.75 million.

Under the terms of the deal, stockholders will receive GBP 0.07 in cash for each Empire share - a rise of 36 per cent over the GBP 0.051 per share they were worth when the markets closed on Friday.

Stockholders may opt for an earn-out alternative in respect of all their Empire shares, earning GBP 0.049 cash per share, GBP 0.051 in loan notes and earn-out rights of a variable amount up to GBP 0.118. Empire management who will continue as directors once the deal is complete must accept this option.

According to an official statement, Empire's independent directors believe the offer is "fair and reasonable" and unanimously recommend shareholders to accept either the cash or earn-out offers.

"Given the difficult trading conditions in the games publishing industry and the increasingly uncertain financial condition of the company, the independent directors believe the offer represents the bestcourse of action available for the Empire business, its employees and all of its shareholders," said Empire's non-executive chairman, Sir Rodney Walker.

Silverstar CEO Clive Kabatznik added: "This is a landmark transaction for Silverstar as Empire had approximately £26.5 million in revenue for the 15 months ended 31 March 2006. The acquisition will provide consistent revenue growth over the next few quarters.

"We look forward to working with the Empire management team to aggressively grow their business, both organically and through future acquisitions. We remain determined to create greater value for our shareholders. This acquisition is a main component of our long-term strategic plan."

Silverstar Holdings specialises in investing in games companies that stand to benefit from the economies of scale possible with the Internet and emergence of new technologies. It already owns developer and publisher Strategy First, plus a stake in Magnolia Broadband.

The Empire acquisition deal is expected to complete late next month.