surged after the video-game maker said late Wednesday it will merge with majority shareholder
France-based Infogrames will pay $11 million, or $1.68 a share, in order to acquire all outstanding shares of Atari. Both companies said the merger agreement will bring to a close a period of financial underperformance for Atari by strengthening it with Infogrames' management team.
Infogrames said the merger will be funded by existing cash resources. The transaction is not subject to any financing conditions and is expected to close in the third calendar quarter. Atari's management, led by recently appointed CEO Jim Wilson, will join Infogrames.
"Bringing Atari U.S. and Infogrames businesses together will enable us to create a simplified global structure for our business as we seek to rebuild a well-managed, cohesive and financially disciplined company," said Infogrames CEO David Gardner. "This is a key strategic event for Infogrames that will benefit all of our shareholders. I believe that this transaction will generate significant benefits for the Group."
"By joining Infogrames, we will have the opportunity to further transform Atari," said Atari's Wilson. "As part of this newly integrated company, we will be better able to streamline operations and have a stronger platform for growth in North America."
Atari said it expects to call a special shareholder meeting to consider the merger in the third quarter, although as Infogrames controls a majority of Atari's outstanding shares, it has the power to approve the transaction without the approval of Atari's other shareholders.
Atari was lately up 11 cents, or 7.1%, to $1.65. Among other game makers,
, which is trying to buy rival
, was flat in early trading.
was also little changed.