Future drops its bid for Highbury House

Magazine publisher Future has decided to drop its bid for rival firm Highbury House after the acquisition - which would have given the company control of 95 per cent of the UK games magazine market - was referred to the Competition Commission

A terse announcement to the London Stock Exchange this morning simply revealed that Future was cancelling its bid in light of the Office of Fair Trading's decision to refer it to the commission, as the offer had lapsed in accordance with its terms.

However, Future chief executive Greg Ingham went into more depth in an internal e-mail to the company's staff this morning and seen by GamesIndustry.biz, which expresses disappointment at the OFT's decision and explaining the firm's reasoning for dropping the bid.

The OFT referred the deal to the commission because of concerns that it would reduce competition in the games magazine sector, where around 95 per cent of circulation would be controlled by Future after the acquisition of Highbury House's Paragon stable of mags.

"This is not a view shared by Future, Highbury, our legal advisers many within the computer games industry itself," Ingham stated in this morning's email. "Barriers to entry are relatively low, and new generations of consoles provide opportunities for launches, a characteristic which is not found in other magazine sectors."

"We do not agree that the OFT verdict is right and do not accept that the deal would have been adverse for consumers," he said. "Ultimately, though, there is no point in bleating about the decision."

Explaining why the referral meant that Future felt it had to drop its bid, Ingham said that the deal could have been delayed by up to six months while the Competition Commission analysed the bid - which would have tied up massive amounts of Future's management time, while leaving the Highbury magazines facing a range of issues which continues to affect their trading.

Despite the failure of the Highbury bid, Ingham said that Future remains committed to "doubling the sales and profit of the business within four years."

"Although we're surprised and disappointed, we move on," he concluded. "We'll find other things to do."