Square Enix has offered to buy a controlling interest in Tecmo at a 30 per cent premium over the current stock price. Tecmo's board of director have until 4 September to make up their minds about the offer, if refused Square Enix will withdraw their offer.
It is hardly surprising to see more consolidation in the Japanese market, since it has been a while since the last wave Square + Enix, Sega + Sammy and Namco + Bandai. Square Enix and Tecmo don't compete in many areas so the move makes sense. Tecmo would provide Square Enix with a couple of franchises, Dead or Alive and Ninja Gaiden, that are popular in the Western market, where Square Enix have had difficulties outside of Final Fantasy and Dragon Quest. Tecmo has had a tough time recently with the Itagaki affair, and it is hard to tell how strong the company is. Perhaps, the buy out is the best option for the shareholders, but it remains to be seen how the Tecmo board reacts to the offer.
We will know soon enough how this will play out...