GT takeover hits stumbling block

Microprose's $250 million takeover of GT Interactive was in tatters last week when the companies terminated their agreement.

In October, Microprose was bidding to purchase GT Interactive to make it the second largest US games company behind Electronic Arts, with a turnover of $500 million.

The termination came as Activision confirmed its acquisition of games distributor CentreSoft, in addition to German distributor NBG, as revealed in last week's PC Dealer. Activision paid $44 million for CentreSoft and $4.4 million for NBG.

Bob Dewar, senior vice president of Activision, said the deal gave it direct access to the retail channel in every European country. He said the service offered by CentreSoft and its PDQ arm was the main reason for the acquisition.

Dewar insisted that CentreSoft would be run autonomously with no personnel changes.

Richard Steele, MD of CentreSoft, said: 'The real attraction for us is the opportunity to expand into Europe using a similar model to that established in the UK.'

Meanwhile, Microprose has warned of an expected third quarter loss of between $7 and $10 million and turnover of between $17 and $20 million in the period ending 28 December. For the same period last year, it made a profit of $5.6 million and turnover of $35.8 million. The company blamed expenses and 'lost momentum' connected with its failed acquisition of GT.

In a statement, Microprose CEO Stephen Race said the company had suffered 'a quarter's worth of slippage' after two months spent trying to work out how to integrate the two companies. He said the company remained 'extremely positive about fiscal 1999'.