Infogrames Entertainment
plans to buy the rest of beleaguered video games pioneer Atari
for US$11 million, the companies said Wednesday.

Infogrames, based in Lyon, France, owns 51.4 percent of Atari's stock. The
merger will give Atari shareholders $1.68 per share in cash.

The deal must be approved by shareholders. Atari plans to call a special meeting
on the merger after July, the companies said. However, since Infogrames owns
a majority of shares, it could push the deal forward without the approval of
Atari's current shareholders.

Infogrames said the merger will allow it to have more control over restructuring
Atari to become a bigger player in the North American market. It will also loan
Atari $20 million to keep its operations going until the deal is complete.

Atari dominated the video game console market in the late 1970s and early 1980s
with classic games such as Pong, Asteroids and Space Invaders. But game and
console makers such as Nintendo and Sega later stole Atari's crown. The company
never fully recovered.

In May 2007, Atari said it would cut its workforce by 20 percent and spend
between $800,000 and $1.1 million on restructuring the company.

Since last October, Infogrames has been working with Atari to stabilize and
focus its distribution efforts. The Atari Group, which operates in the U.S.,
Europe and Asia, produces games such as Alone in the Dark, V-Rally, Test Drive,
Backyard and licenses others such as Dragon Ball Z.

Those games are produced for a variety of platforms, including Sony's
PSP and PlayStations
2 and 3, Microsoft's
Xbox 360 and Nintendo's
DS, Wii and GameBoy
Advance.

In March, Jim Wilson, a video-game industry veteran, was appointed as Atari's
CEO. Wilson most recently worked as executive vice president and general manager
of Sony Wonder, part of Sony BMG’s home entertainment business.

Infogrames has owned the Atari name since 2001, and it has been releasing games
under the Atari moniker since then.

IDG News Service

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