Warthog sells subsidiaries to Gizmondo in $8 million deal

British development group Warthog Plc has arranged a deal with Tiger Telematics Inc, parent company of Gizmondo Europe, which will see all of the firm's subsidiaries being taken over by the handheld console manufacturer.

The surprise deal was announced to the stock market this morning, with the transaction being undertaken without the seeking of approval from Warthog's shareholders due to a pressing need to complete it as quickly as possible.

New owner Tiger Telematics, a US firm which specialises mostly in devices such as global positioning systems for professional use, is the parent company of Gizmondo Europe Ltd, which launched its first handheld console, the eponymous Gizmondo, into the UK last Friday.

Tiger Telematics will be taking on all of the subsidiaries of Warthog Plc, as well as all of their debts to the firm, with a total payment of $8.1 million being made, including assumed debts. That amount is divided into $1.13 million in cash and 497,866 shares in Tiger Telematics stock (TGTL).

The shares are restricted and can not be traded until the anniversary of the completion of the deal, and UKP 150,000 of the cash quantity will also be held in escrow for a year and released conditionally on the fulfilment of certain warranties.

Warthog executive directors Ashley Hall, Steven Law and Simon Elms will all be moving over to Tiger Telematics as part of the deal, while the remaining Warthog Plc company will shortly be arranging an EGM with a view to changing its name.

The aim of the buyout, from Gizmondo's perspective at least, is to give the company access to a library of existing game content and the technology to port titles to its new console platform.

Although the Gizmondo device has been launched relatively quietly in the UK, the firm plans to step up promotions over the coming weeks - and is planning, among other things, a dedicated Gizmondo retail outlet on London's busy Carnaby Street in the run up to Christmas.

"The board considers... that this transaction represents the best available outcome for the company and its shareholders," Warthog said in a statement issued today. "The board of Warthog has sought to complete this transaction as rapidly as possible because the group has continued to face difficult trading conditions within the games development industry."

The fate of Warthog's projects for home console platforms is unknown at present, and it's also unclear whether this purchase will lead to any further redundancies among the firm's remaining staff.