Automobile

Electronic Arts will pay $1.2 billion for Codemasters, outbidding Take-Two

News Post || Auto:

Video games maker Electronic Arts said on Monday it had reached an agreement to buy Codemasters in a deal worth $1.2 billion, trumping an earlier agreement between the British company and rival Take-Two Interactive Software.

Shares in London-listed Codemasters surged 18.7% to 637.84 pence by 0845 GMT — above the 604 pence per share offered to the company’s shareholders by EA.

UK-based Codemasters, known for its Formula One games for Playstation 4, said it considered the new offer to be superior to Take-Two’s cash-and-stock buyout offer of 485 pence per share.

Ads

Take-Two said it was considering its position.

California-based EA, as well as rivals Activision Blizzard and Take-Two, have benefited from a surge in video game sales in the United States fueled by the trend of people spending more time indoors due to the COVID-19 pandemic.

But that trend could reverse next year as countries begin vaccinating people against COVID-19.

“With the full leverage of EA’s technology, platform expertise, and global reach, this combination will allow us to grow our existing franchises and deliver more industry-defining racing experiences,” EA Chief Executive Officer Andrew Wilson said.

EA’s offer represents a premium of 13.1% to the last closing price of the company’s shares and it expects the deal to be completed in the first quarter of calendar 2021.

RELATED:  GMC Canyon SVE Syclone upgrade is a steep $79,995

“We think Codemasters is an attractive asset with a lot of the qualities a consolidator might look for… It also has a strategic relationship with Chinese operator NetEase, offering a direct route in the lucrative Chinese market,” Citi analysts said.

EA, maker of The Sims, Need for Speed and FIFA, said it expects the deal to grow net bookings and underlying profitability.

UBS Investment Bank is acting as financial adviser to Electronic Arts, while Jefferies is the financial adviser for Codemasters.

Latest Auto Motor News Today Headlines Check More Links

Daily News Post || News Now || World News || US News || UK Today || Tech News || Automobile

Source

Tags
Show More

Related Articles

Back to top button
Close