SplitFish Prepares Offer For Hip Interactive As CFO Resigns

Author: by David Jenkins, Simon Carless

Representatives from Canadian-headquartered hardware design company SplitFish have announced that the company is preparing a business combination proposal for consideration by the board of directors of fellow Canadian games publisher Hip Interactive. Hip recently got into difficulties when it was forced to announce that audited financial statements for the year would not be filed in time – which lead to a temporary halt on trading in the company’s shares. In more recent news, Hip Interactive has now announced that it has defaulted under the terms of its secured loan facility, after its delayed financial results were expected to show a loss before income taxes of between $20 and $21 million, and Hip CFO Mark Steinman has resigned. Chief Executive Arindra Singh is operating as CFO temporarily. Proposed suitor SplitFish GameWare is involved in the research, development and distribution of video game hardware technologies, with its head office in Edmonton and a research and development facility in Beijing. The company has produced a wide range of peripherals for the PlayStation 2 console, including light guns, HDTV converters and various controllers. This coincides with Hip Interactive’s product line, which also includes a significant range of peripherals and controllers, though Hip has recently been making a major push into game publishing, with titles including Pariah, Stolen, and the forthcoming Call of Cthulhu: Destiny's End and George Romero's City of the Dead. "We plan to enter into discussions immediately to determine Hip's board, management, creditor and suppliers interest in a business combination," said Ken Tetterington, a director of SplitFish. If accepted, the SplitFish proposal would result in a change of control of Hip. However, Hip issued a later statement indicating: "Although the company is pursuing discussions with Splitfish, it is unlikely that these discussions will lead to any transaction in the immediate future". According to the statement, Hip is pursuing discussions with "a third party" over this coming weekend regarding increased financing, and if the un-named third party cannot help, the Pariah publisher may have to appoint an interim receiver. [UPDATE: 10.39am PST - Added information on CFO departure, new Hip comments on SplitFish.]