Midway UK in ’50p MBO’

A new filing with the US’ Securities and Exchange Commission has revealed more details on the slow collapse of Midway – and shows that the UK office has been bought for what amounts to less than 50 pence.

Midway’s managing director for Europe Martin Spiess has negotiated the bargain deal, which sees him buy both the Midway Games France and UK offices for €1. (Equivalent to around 86 pence at the current exchange rate.)

The move is effectively a management buyout. Midway Germany’s general manager Uwe Frstenberg has similarly negotiated the purchase of that office, the SEC filing also reveals – although it doesn’t specify how much Frstenberg’s outfit F+F Publishing paid.

And just in case you need reminding: Midway itself went into bankruptcy in February, with some of its US assets and studios, plus most of its IP, eventually purchased by Warner Bros in June.

In recent weeks question marks hung over the unwanted assets.

Following last month’s closure of Midway Newcastle, the development team responsible for The Wheelman, this final revelation explains what has happened to the rest of the business. (THQ has stepped in to buy Midway’s San Diego studio, the SEC filing also shows – click here to read more on that.)

Midway UK and France will now be owned by Spiess Media Holding UG – a German company the SEC report explains was ‘formed by Martin Spiess for the purpose of purchasing the shares of [Midway Games UK] and [Midway Games France]’.

The deal states that Midway’s European teams now have just 90 days to sell the rest of the Midway branded/developed/published stock they have.

Another specific clause in the agreement says the offices must otherwise drop the Midway name immediately.

The deal also terminates Spiess’ and Frstenberg’s employment with Midway as the ties between the remaining assets of the Midway business and its US HQ are severed.

The SEC filing implies that Midway Games US will also eventually benefit from the sale. Spiess and Frstenberg’s winding down of Midway UK, France and Germany, the filing says, should result in the resolution "of certain intercompany obligations" which will mean "a payment of approximately One Million Seven Hundred Thousand Dollars ($1,700,000) from [Midway Games Limited] to [Midway USA] at the closing of the transactions".

It’s not yet clear what Spiess’ future plans for his new enterprise will be once those ‘obligations’ are wrapped up, but MCV should have more details soon.