26.1 C
Delhi

Racing games Developer Codemasters to be bought by EA for $1.2 billion

Codemasters Group Holdings Plc has agreed to a $1.2 billion bid from US publishing giants Electronic Arts Inc. Take-Two Interactive Software Inc.’s bid of $956 million was topped by EA and the deal is expected to close in the first quarter of 2021 for £6.04 (approximately $7.98) a share, valuing Codemasters at around $1.2 billion, according to a statement released by Codemasters on Monday.

Codemasters, the maker of the popular Formula 1 racing franchise, have soared in value with consumers stuck at home due to the pandemic and the rival offer could spark a bidding war for the video game makers. In London, on Monday, shares in Codemasters rose as much as 19% to 634 pence in trading. In November, Take-Two first revealed a cash-and-stock deal agreement for Codemasters. The U.K. firm was valued at about 528 pence per share in that offer based on Take-Two’s last closing price. The new EA deal values UK developers at about 14.4% higher than Take-Two’s offer.

Take-Two’s bid was already facing an unpleasant reaction from the investors. The cash and stock proposal’s value has fluctuated over time, and it translated into more than a 1.1% discount to Codemasters’s share price as of Friday’s close. The takeover doesn’t value Codemasters as high as its listed peers, argued Columbia Threadneedle Investment.

“To strengthen the position that Codemasters has built within the racing category, there is an increasing necessity for additional investment in both resources and skills across its portfolio,” Codemasters said in a statement Monday according to Bloomberg.

- Advertisement -TechnoSports-Ad

Analysts remain unconvinced, although Codemasters’ board has sided with EA. “In some respects, EA’s move feels defensive,” said Neil Campling, an analyst at Mirabaud, “because they are already under attack from Take-Two and many of their franchises are becoming second rate relative to leaders.”

“Take-Two is considering its position in relation to Codemasters and a further announcement will be made when appropriate,” Take-Two said in a statement Monday.

Over the past pandemic-hit year, the gaming sector has seen a flurry of deals across all platforms, the biggest of which includes Microsoft Corp.’s $7.5 billion deal for ZeniMax Media Inc. and Zynga Inc. buying out mobile developer Peak for $1.8 billion, to create Turkey’s first gaming unicorn. The stay-at-home pandemic has sent the video game industry revenue up 20% this year to $174.9 billion, outstripping earlier forecasts and dwarfing the market’s growth in 2019.

- Advertisement -TechnoSports-Ad

SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

TechnoSports-Ad

Popular

TechnoSports-Ad

Related Stories

More from author

Top 10 Richest Football Club Owners in the World in 2024

Football, one of the most popular sports with an estimated 4 billion fans worldwide, is not just a sport anymore but has also turned...

Top 5 players with the most goals for Indian national football team

Football is still a sport that is on the rise in India, with it still finding its feet among the public, though in recent...

Top 10 Most Popular Sports in the World in 2024

Here we bring to you the Top 10 Most popular sports in the world From our early childhood years when we take sports very seriously...

Top 10 Semiconductor Foundries of The World in 2023

Know the Top 10 Semiconductor Foundries in the world here as of 2023 A semiconductor foundry, also known as a fab or se­miconductor fabrication plant,...