Report: Tecmo Explains Square Enix Rejection

Tecmo released a formal statement explaining its decision to reject Square Enix's takeover offer and pursue a merger with Dynasty Warriors-publisher Koei instead, explaining that the change in plans is is "concretely beneficial" to Tecmo shareholders. Square Enix announced its bid to acquire Tecmo with a buyout valued at $206 million dollars in August. Tecmo later revealed that it was working on a detailed merger plan with Koei, claiming that this alternative will give Tecmo a better shot at "boosting corporate value," even though the proposed merger would create a company only a third Square Enix's size. When notified about Tecmo's rejection and intentions to merge with Koei, Square Enix withdrew its offer for a friendly takeover and requested an explanation from the Ninja Gaiden developer to clarify its decision. Square Enix first asked that Tecmo confirm that its rejection of the company's buyout bid resulted from its talks with Koei, to which Tecmo formally verified. Square Enix then asked Tecmo to clarify whether its major terms of integration of management with Koei are favorable for its shareholders, if indeed its rejection of Square Enix's offer was based on its talks with Koei. According to the statement translated by game weblog Kotaku, Tecmo responded, "Supposing this is the case, then the plan to merge with Koei (form of the integration, stock prices assumption, integration ratio and so forth) is concretely beneficial to Tecmo shareholders." Square Enix's third and final question asked that the studio confirm it has an alternative plan favorable to Tecmo's shareholders, assuming that its acquisition rejection did not result from its Koei talks. Tecmo answered, "Supposing this isn't the case, then we would disclose alternatives that would be advantageous to shareholders." The company's statement concluded: "Conversely, regarding the proposal from Koei, there is time for management to consider how to integrate and most likely arrive at ultimately raising our corporate value. This is why we have begun talks with Koei concerning corporate integration."