EA Looks to Beat Take-Two With $1.25 Billion Bid for Codemasters -- 2nd Update
December 14 2020 - 7:36PM
Dow Jones News
By Sarah E. Needleman
Two of the videogame industry's largest publishers are grappling
to control a U.K.-based studio with a long history in auto-racing
games, the latest example of steep competition to amass content
amid broader demand for interactive entertainment.
Electronic Arts Inc. said Monday it reached a $1.25 billion deal
to acquire Codemasters Group Holdings PLC after the company's board
accepted its proposal. Codemasters, which has about 700 employees,
had been evaluating an earlier offer from Take-Two Interactive
Software Inc.
Electronic Arts, known for its hit franchises such as
Battlefield, FIFA and The Sims, said it expects to complete the
all-cash transaction in the first quarter of 2021.
In response to Electronic Arts' move, Take-Two said it is
considering its position and would make a further statement when
appropriate. A spokesman for the Grand Theft Auto publisher
Take-Two declined further comment.
Codemasters said Take-Two made its initial acquisition proposal
in September, according to a securities filing. Take-Two on Nov. 10
said it reached a deal valued at nearly $1 billion in cash and
stock. Codemasters said Electronic Arts made its initial overture
after it agreed to Take-Two's proposal and received a purchase
offer from the company Thursday.
Codemasters went public in June 2018. Its London-listed shares
rose 23% Monday, trading higher than EA's acquisition price.
Meanwhile, shares in EA rose 1.2% and Take-Two's stock gained
2.6%.
The videogame industry has been on a tear this year, with the
pandemic driving up consumer spending on games and gaming
equipment. Deal activity has been increasing in tandem. The sector
has had $12.1 billion worth of mergers, acquisitions and buyouts
and $2.3 billion of venture investments this year through
mid-December, according to PitchBook. That compares with $7.8
billion of deals and $1.7 billion of venture investments for all of
2019.
Codemasters' F1 racing-game franchise complements Electronic
Arts' Need for Speed series, said R.W. Baird analyst Colin
Sebastian. Need for Speed is made by Criterion Games, a U.K.-based
studio that Electronic Arts acquired in 2004. The racing genre also
includes Microsoft Corp.'s Forza and Sony Corp.'s Gran Turismo
series, among others.
"With Codemasters, EA will clearly be a strong competitor, if
not a market leader now in racing," Mr. Sebastian said.
Ian Walker contributed to this report.
Write to Sarah Needleman at Sarah.Needlema@WSJ.com
(END) Dow Jones Newswires
December 14, 2020 19:21 ET (00:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Electronic Arts (NASDAQ:EA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Electronic Arts (NASDAQ:EA)
Historical Stock Chart
From Sep 2023 to Sep 2024