Feb. 12 (Bloomberg) -- Square Enix Holdings Co. will offer 84.3 million pounds ($120 million) to acquire Eidos Plc, adding intellectual property for video games including “Tomb Raider.”

The company will offer 32 pence a share for Eidos, Tokyo- based Square Enix, creator of the “Dragon Quest” series of role-playing games, said today. That’s more than double the 14 pence closing price yesterday for London-based Eidos, which surged to 31.75 pence after the announcement.

Publishers such as Square Enix and Namco Bandai Holdings Inc. rely on hit titles to bolster sales and recoup development costs. Square Enix is seeking more games after forecasting full- year profit will fall 51 percent to 4.5 billion yen ($50 million) because of a delay in the release of the newest installment of “Dragon Quest” for Nintendo Co.’s DS player.

Eidos has a “broad portfolio of highly successful mass market franchises, led by Tomb Raider,” Square Enix President Yoichi Wada said in a statement. “We believe that wide range of both companies’ quality products encompassing major genres will enable us to meet diversified customers’ expectations.”

The company said it expects to complete the Eidos offer by the end of April.

Eidos jumped 17.75 pence to 31.75 pence in London trading. It had slumped 69 percent in the 12 months before today. A unit of Time Warner Inc. holds a 20 percent stake.

“Major issues” with “Dragon Quest IX” for the DS forced the company to push back the game release to July 11 from March 28, Square Enix said.

‘Final Fantasy’

Profit at Square Enix’s game-software business, which accounts for 36 percent of operating income, slumped 45 percent to 4.8 billion yen in the nine months ended Dec. 31, while sales declined 17 percent to 28.5 billion yen.

Square Enix, which gets about a quarter of revenue from game software, said in November that almost one in two games sold by the company in the first half of the fiscal year were installments of “Dragon Quest” and “Final Fantasy.”

Operating profit, or sales minus the cost of goods sold and administrative expenses, will decline 44 percent to 12 billion yen this fiscal year, as sales decrease 9.8 percent to 133 billion yen, Square Enix said.

Eidos games to be released this year include “Just Cause 2,” “Battlestations Pacific” and “Batman: Arkham Asylum,” which Eidos is producing and marketing in partnership with Warner Bros Entertainment Inc.

Bank Loans

Last month, Eidos said it needed to renegotiate bank financing after worse-than-expected Tomb Raider sales in December. The company, formerly known as SCi Entertainment, said revenue for the year through June would not exceed 180 million pounds, as much as 10 percent less than its previous projection.

Separately Namco Bandai said profit at its game-content business, which includes titles for arcades and home consoles, rose 1.7 percent to 10.2 billion yen in the nine months ended Dec. 31, as sales gained 1.6 percent to 106.2 billion yen.

“Soul Calibur IV” for Sony Corp.’s PlayStation 3 and Microsoft Corp.’s Xbox 360 sold 2 million units in the period, helping bolster earnings, Namco Bandai said.

Nintendo was the largest video-game publisher in Japan as of March 2008, followed by Namco Bandai and Square Enix, according to Tokyo-based Enterbrain Inc.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

Last Updated: February 12, 2009 13:36 EST