Shares in London-listed Codemasters surged 18.7 percent to
GBP 6.37 by 08:45 GMT (2:15pm IST) above the GBP 6.04 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 GBP 4.85 per share.
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 videogame sales in the United
States fuelled 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.
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"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 percent 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.
"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.
© Reuters