Digital Illusions shareholders reject EA buyout

Electronic Arts' planned acquisition of Swedish developer Digital Illusions CE has hit a major obstacle, with shareholders representing 28 per cent of the firm's stock rejecting the proposed deal.

Last month the developer's board of directors recommended to shareholders that they should accept EA's offer for the company, which valued each share in Digital Illusions at 61 SEK (6.78 Euro at current conversion rates).

However, two groups of shareholders have announced their opposition to the deal, and between them they represent around 28 per cent of the firm's stock - enough to prevent the acquisition from happening, according to Swedish financial news site di.se, which explains that 90 per cent of shares must vote in favour of the deal for it to be passed.

Electronic Arts, which publishes the company's Battlefield titles (although the brand continues to belong to DICE), currently holds around 19 per cent of Digital Illusions stock, but wishes to make the studio into part of its European studios group, which also includes recent acquisition Criterion.

The shareholders who oppose the deal believe that the developer's performance and future prospects are strong enough to make remaining independent into a more attractive option, in particular given the planned launch of Battlefield 2 on the PC and Battlefield: Modern Combat on current and next-gen consoles next year.

The two companies have less than a fortnight to convince the recalcitrant shareholders to vote in favour of the deal - the deadline for successful closure has been set as December 27th, 2004.

Update #1: Confirmed Digital Illusions' ownership of the Battlefield brand