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Future Publishing Withdraws Highbury House Bid

Following the news yesterday that UK magazine giant Future Publishing’s bid for rival Highbury House was being
April 15, 2005
Following the news yesterday that UK magazine giant Future Publishing’s bid for rival Highbury House was being investigated by the British Office of Fair Trading (OFT), the company has withdrawn its bid. An official statement from Future Publishing released on the financial newswire today indicated: "Future plc believes that it would not be in the interests of Future plc's shareholders to pursue further a possible acquisition of the issued ordinary share capital of Highbury." The Office of Fair Trading had decided that there were sufficient concerns that the combination of the largest supplier of computer games magazines in the UK with its largest competitor may lead to a substantial lessening of competition in the UK - essentially a monopoly-related concern. Future's argument against this, stated in an e-mail sent to its staff this morning and obtained by industry website GamesIndustry.biz, was that: "Barriers to entry [into the British video games magazine market] are relatively low, and new generations of consoles provide opportunities for launches, a characteristic which is not found in other magazine sectors." The company officially indicated that Future's executive team made the decision late last night, resolving that it was unwilling wait for the Competition Commission to make a ruling, even though the UK government had not yet ruled out the Highbury acquisition. However, some online sources indicated that the Future's major shareholders, which include investment firms Schroders and Fidelity, may have expressed disquiet about pulling through with the now-controversial deal. Whether this is correct or not, Future CEO Greg Ingham was relatively hardheaded when talking to employees in his staff email, arguing: "We do not agree that the OFT verdict is right and do not accept that the deal would have been adverse for consumers. Ultimately, though, there is no point in bleating about the decision."

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