[ad_1]
Electronic Arts is preparing to bid for UK-based video game maker Codemasters, ignoring its American gaming rival Take-Two Interactive, according to people with direct knowledge of the situation.
The offering from California-based EA would disrupt a planned cash-and-stock deal agreed between Take-Two and Codemasters last month and is expected to value the UK company at more than £ 900 million, these people said.
EA’s offering is expected to carry a premium of more than 10 per cent over Codemasters’ London closing price of 534 pence on Friday.
The offer could be announced on Monday; However, these people warned that a leak on Sunday by Britain’s Sky News channel about EA’s interest could complicate the move.
EA’s purchase of Codemasters at a valuation of more than $ 1 billion would rank as the largest deal in the California-based company’s history, but its move could still trigger a bidding war.
Take-Two, father of Grand Theft Auto and NBA 2K games, and Codemasters had agreed to a cash-and-shares deal in early November that initially valued the Warwickshire-based company at around £ 759 million ($ 994 million).
Although Take-Two’s share price has subsequently risen, increasing the value of its offering, some Codemasters shareholders had expressed frustration that the 34-year-old gaming company had accepted only a modest premium compared to its trading levels. previous.
A deal with EA would unite the Silicon Valley-based publisher’s formidable group of sports games, including the FIFA football and American madden soccer franchises, featuring racing simulators from Codemasters. EA is one of the largest video game companies in the world, valued at nearly $ 40 billion, and is strongest in the PC and console markets, where Codemasters has also focused.
The battle for Codemasters follows a year of deals in the gaming industry, capped off by Microsoft’s $ 7.5 billion plan to acquire ZeniMax, as the pandemic drew record audiences for both consoles and mobile games.
Console makers like Sony and Microsoft, as well as internet groups like Google and Amazon that launched cloud gaming services over the past year, have been vying for exclusive content rights to win players for their platforms.
Sports games have proven to be particularly attractive during coronavirus-induced lockdowns, as traditional leagues have been unable to play or have been forced to play behind closed doors. That has accelerated the momentum in competitive gaming, with Formula One racing running its own professional esports tournament based on Codemasters software.
Both EA and Codemasters declined to comment on the talks.
In a note to clients Sunday night, Mirabaud analysts noted that EA’s offering came when Codemasters was at the top thanks to strong criticism of its latest racing game. F1 2020.
“In some respects, EA’s move feels defensive, because they are already under attack from Take-Two and many of their franchises are becoming second-rate relative to the leaders,” wrote Neil Campling, Head of TMT research at Mirabaud.
“If EA bids, I think [Take-Two] can counter with a higher bid due to Codemasters’ long-term strategic value [intellectual property] and Technology. “
