Square Enix is withdrawing from the proposal it made last week to acquire Japanese-based publisher Tecmo. Square Enix received a written letter of rejection yesterday and immediately responded to Tecmo with questions regarding their decision to enter consolidation talks with Koei. No reply was received, and as such, Square Enix is stepping down from its offer, noting that it is “extremely difficult to continue the discussions with Tecmo” based on the current proposal.

Full release after the jump.

September 5th, 2008

Notice Regarding Withdrawal of the Proposal to TECMO for Friendly TOB

As announced on August 29, 2008, SQUARE ENIX CO., LTD. (the “Company”) submitted to the board of directors of TECMO, LTD. (Securities Code: 9650, 1st Section of the TSE, “TECMO”) a proposal for basic conditions of acquisition of shares of common stock issued by TECMO through a friendly takeover bid (the “TOB”) (the “Proposal”) in order to obtain consent to the TOB by the board of directors of TECMO.

The Company yesterday received a written notice of rejection of the Proposal from the board of directors of TECMO. Followed by the notice, the Company immediately requested TECMO for explanation of some issues to receive no response to it, even reasons of the rejection.

Under such circumstances, the Company is unable to make appropriate modifications to major terms of the Proposal including the TOB price, and determines that it is extremely difficult to continue the discussions with TECMO based on the Proposal. The Company, therefore, has decided to withdraw from the Proposal.

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