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Monday, 30 April, 2001, 11:35 GMT 12:35 UK
Battle for games firm escalates
Gameplay logo
Shares in video games firm Gameplay, which have lost almost 99% of their value in 13 months, have ended their downhill slide after bidders swooped on the troubled distributor.

Gameplay shares, which topped 10 at the height of last year's dot.com boom, recovered more than 4p to stand at 18.5p in morning trade.

The rise followed the announcement by the company, which earlier in April admitted receiving bid approaches for two divisions, that outside buyers have now made offers for "all or parts of the group".

And Gameplay's own managers have joined the fight to snap up assets in the games distributor, proposing to buy the Leeds-based mail order division.

While warning "there is no certainty" of striking a deal with any of the bidders, directors confirmed that negotiations were ongoing.

Acquisition trail

The offers follow a troubled period for Gameplay, which was founded two years ago with the goal of becoming Europe's "leading online games destination and community", boasting game development and retail arms.

Mark Strachan, chairman, Gameplay
Mark Strachan: takeover experience
The firm, chaired by Mark Strachan who negotiated the 5.2m sale of games journal Computer Trade Weekly and co-founded a software company sold to Eidos for 10.5m, embarked on a growth strategy based around acquisitions.

German distribution business Joysoft and UK mail order company Interactive Computer Enterprises were among early purchases.

Gameplay achieved a stock market value of 54m when it was floated in August 1999, with the firm's share price subsequently rising by almost five times up to a peak in March last year.

The firm also followed the likes of Eidos, creator of Lara Croft, in developing a virtual character, and developed Eve as its host for its website operations.

U-turn

But the firm was forced to abandon its aggressive growth strategy after the bursting of the internet bubble last year soured investor sentiment over internet stocks.

Gameplay, which last summer announced plans to integrate its divisions and remain at the cutting edge of the games market, in January disposed of its Austrian-based games development business Neo Software.

Two days later the firm unveiled a restructuring, axed 275 jobs, and said that non-core businesses would be closed or sold to allow a focus on its web activities and mail order business.

Gameplay, which has lost three directors including a representative of retail giant Dixons within the last two months, earlier in April revealed it had hired Commerzbank Securities to "review the group's activities".

Gameplay shares retreated in later trading to 17p.

At Friday's closing price of 14.25p, the firm had a stock market value of 12.7m.

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