[UPDATE – Bid Is Official] Codemasters Might Be Actually Acquired by EA Instead of Take-Two
The news is now official, following a press release just issued jointly by EA and Codemasters. The UK game developer has been valued at 604 pence in cash per each ordinary share, which turns into an overall value of $1.2 billion.
Gerhard Florin, the Chairman of Codemasters, stated:
Electronic Arts and Codemasters have a shared ambition to lead the video game racing category. The Board of Codemasters firmly believes the company would benefit from EA’s knowledge, resources and extensive global scale – both overall and specifically within the racing sector. We feel this union would provide an exciting and prosperous future for Codemasters, allowing our teams to create, launch and service bigger and better games to an extremely passionate audience.
Andrew Wilson, CEO of Electronic Arts, added:
We believe there is a deeply compelling opportunity in bringing together Codemasters and Electronic Arts to create amazing and innovative new racing games for fans. Our industry is growing, the racing category is growing, and together we will be positioned to lead in a new era of racing entertainment. We have admired Codemasters’ creative talent and high-quality games for many years. 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 to a global fan base. We are pleased that both our Boards of Directors are recommending this transaction, and we look forward to welcoming such an exciting and talented team to the Electronic Arts family.
However, this Monday Take-Two also issued a very brief response where the company affirmed its intention to 'consider its position in relation to Codemasters and a further announcement will be made when appropriate'. In short, there could be a counterbid coming up.
It looks like a bidding war surrounding UK game developer and publisher Codemasters is coming up in the near future. Following Take-Two's official bid (estimated around £740 million), Sky News today reports that Electronic Arts is preparing a 'knockout bid' that would trump Take-Two's offer to buy Codemasters. This bid, reportedly in the works with bankers at UBS, is expected to be made public in early Monday morning.
As a reminder, here's what Take-Two CEO Strauss Zelnick stated when the company announced its intent to buy Codemasters.
We are exceedingly pleased to announce this recommended transaction with the board of Codemasters.
Codemasters has a renowned history of creating some of our industry's most beloved and commercially successful racing franchises, and we believe that their offerings will be highly complementary to our sports portfolio and enhance further our organization's long-term growth.
Moreover, we look forward to welcoming Codemasters' senior management and development teams into our Take-Two family, and sharing in our vision to deliver the highest quality entertainment experiences and aim to be the most innovative, creative and efficient company in our industry.
The actual offer made by Take-Two was 485 pence per share. However, Sky News believes EA's offer could be much higher, rewarding Codemasters and its shareholders for more than its current stock price (534 pence as of last Friday). Stay tuned for more on this potentially big power move in the games industry.