Infogrames Entertainment

Exchange OfferOCEANEs 2004 et 2005

October 28, 2003

Disclaimer• Ce document ne doit pas être publié, distribué ou diffusé aux Etats-Unis d’Amérique. Ce document ne constitue

pas une extension aux Etats-Unis de l’offre publique d’échange mentionnée dans le présent document et ne constitue pas une offre de vente de valeurs mobilières aux Etats-Unis ou une sollicitation d’un ordre d’achat de valeurs mobilières aux Etats-Unis.

• This document is for distribution in the United Kingdom only to persons who (i) have professional experience in matters relating to investments and/or (ii) are persons falling within Article 49(2)(a) to (d) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. There will be no offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended by The Financial Services and Markets Act 2000."

In September 2002, the Group set up 3 goals

1- operational restructuring

2- return to profitability

3- cash generation

The achievement of these 3 objectives was a prerequisite to qddressing the debt issue in the most favourable conditions

3 major steps in refinancing the CB 2004 & CB 2005

• Dec 2001 : buy back of CB 2005 for cash €101 M

• Dec 2002 to Jan 2003 : buy back of CB 2005 € 88 M• Current transaction :

– commitment to tender €108 M – Exchange Offer ++

Not including the public offering of shares in the Atari Inc

(Sept 2003) for $131 M

Evolution of CBs 2004 & 2005

0

100

200

300

400

500

600

06/30/01 12/31/01 06/30/02 01/31/03 06/30/03 Proformapost-

comittmentsto tender

CB 04 CB 05

125.8

412.3

125.8

311.4

125.0

309.1

124.3

221.5

124.3

218.1

86.3

148.1

538.1

437.2 434.1

345.8 342.4

233.9

€ 101 M Buy Back

€ 88 M Buy Back

Commitment toTender € 108 M

Offer

if 100% take-up rate CB 04 CB 05 Total

In € M 124€ M 218€ M 342€ M

Exchanged for

Cash 39.7€ M33%

- 39.7€ M

New shares)*( 32.0€ M27%

22.8€ M12%

54.8€ M

CB 2009)**( 48.6€ M40%

165.6€ M88%

214.2€ M

Irrevocable commitment to tender from certain bondholders holding €108 M of convertible debt.

: )*(share price : €4.60 per share : )**(with warrants attached (together qn OCABSA)

Commitment to tender• Certain bondholders have already agreed to the

proposed terms and conditions of the Offer and have irrevocably committed to tender their bonds to the Offer

• Commitments represent €108 M of convertible debt :– 30.6% of CB 2004 or €38 M of convertible debt– and 32.1% of CB 2005 or €70 M of convertible debt

• Offer is not conditional upon any minimum acceptance rate

OfferAcceptance rate €108M (*) 66.7% 100.00%

Before CB 04 124.3 124.3 124.3

CB 05 218.1 218.1 218.1

Total 342.4 342.4 342.4

Total tendered CB 04 38.0 82.9 124.3

CB 05 70.0 145.5 218.1

Total 108.0 228.4 342.4

Package Cash 12.1 26.5 39.7

Shares 17.1 36.6 54.8

OCABSA 68.0 142.9 214.2

Total 97.2 205.9 308.7

After OCABSA 68.0 142.9 214.2

CB 04 86.3 41.4 -

CB 05 148.1 72.6 -

Total 302.4 256.9 214.2

(*) €108 M commitment to tender only

Necessary Approvals

Offer subject to :

– Stock Exchange Authorities approval(COB, CMF,…)

– IESA’s shareholders approval

Indicative timetable

• Filing with CMF and COB : October 28, 2003

• CMF clearance on terms and conditions: November 5, 2003– « Avis de recevabilité » published by the CMF– COB visa

• Offer period: from November 7 to 27, 2003 (15 trading days

• Offer results: December 8, 2003

• IESA’s EGM approval : December 17, 2003 (at the latest)

• Settlement : December 22, 2003

• This offer will significantly improve IESA’s balance sheet by (100% take-up rate) :- reducing the convertible debt by €128 M (*)- lengthening the debt maturity profile (from 1.5 to 4 years)- immediately increasing the shareholders equity by :

€54.8 M (**) (11.9 million new shares)- further potential strengthening of shareholders equity through the potential conversion of the new CB 2009

(€214.2 M) and the exercise of attached warrants (€36.7 M)

(*) excluding CB 2009 redemption premium(**) based on €4.60 price per share

Impact for the Group

Impact for the Group

Acceptance rate)%( Increase in shareholder’s equity (1)

Irrevocable commitment 17

66.7% 37

100% 55

Impact on shareholder’s equity (in €M)

(*) issue price of new shares €4.60, closing price on October 24, 2003.

Acceptance rate)%( Net debt reduction

Irrevocable commitment (28)

66.7% (59)

100% (88)

Net debt reduction (in €M)

Offer value for bondholders• The Offer values :

- Each CB 2004 at approximately €90.95 (based on a €4.60 closing price per share as of October 24, 2003)- Each CB 2005 at approximately €39.88 (based on a €4.60 closing price per share as of October 24, 2003)

• The table below indicates a summary of Offer premium for each CB

Premium in % (1) CB 2004 CB 2005

October 24, 2003 3.8% 7.2%

10-day average price 4.3% 8.0%

1-month average price 5.0% 8.4%

3-month average price 12.0% 22.4%

12-month average price 51.4% 81.3%

(1) Average trading price as indicated by brokers disclosing daily prices over therespective periods shown (Crédit Lyonnais, Deutsche Bank, Citigroup)

Potential dilution

Acceptance rate)%( New shares (M) Dilution)*( )%( Irrevocable commitment 3.7 3.2%

66.7% 7.9 6.6% 100% 11.9 9.6%

Immediate dilution

(*) percentage of enlarged share capital post-issue (based on 111.7 million shares outstanding as of September 30, 2003).

Acceptance rate)%( New shares (M) Dilution)**( )%(

Irrevocable commitment 11.7 12.1%

66.7% 24.5 22.5%100% 36.7 30.3%

Potential dilution through conversion (CB 2009 and warrants)

)**(percentage of enlarged share capital post-issue (based on 111.7 million shares outstanding as of September 30, 2003) and including immediate dilution effect of new shares issued.

Appendices

1. Detailed Offer terms

• Maximum number of bonds to be tendered– 1 323 005 CB 2004 (excluding CB held by the Group)– 4 730 123 CB 2005 (excluding CB held by the Group)

• For each CB 2004 :– €30 in cash– 5.25 IESA ordinary shares to be issued– 5.25 CB 2009 to be issued– Each CB with a warrant attached

• For each CB 2005– 1.05 IESA ordinary shares to be issued– 5 CB 2009 to be issued– Each CB with a warrant attached

• CB 2009 and the attached warrants are together defined as « OCABSA »

2.Terms and conditions of CB 2009

Issuer Infogrames Entertainment SA

Maturity date Avril 1, 2009

Coupon 4%

Par value 100% (€7.00)

Issue Price for OCABSA 100% of par value (including 1 warrant)

Redemption Price 107.7% of par value

Yield to maturity 5.31%

Conversion Price €7.00

Convertible into 1 New or existing ordinary IESA share per €7.00 convertible bond

Call features After 2 years / 130%

Listing Euronext Paris

3. Terms and conditions of the warrantsIssuer Infogrames Entertainment SA

Issue 1 warrant issued per new CB 2009

Maturity date June 30, 2005

Exercise price €6.00

Exercisable into 1 new ordinary IESA share per 5 warrants

Exercise period Exercisable at any time from settlement to the maturity date

Listing The warrants will be listed on Euronext Paris and can be traded separately from the CB 2009