(Sharecast News) - Codemasters Group has agreed to be bought for about £945m by Electronic Arts (EA) of the US in a deal that eclipses a previously agreed bid from Take-Two Interactive.
Codex Games, a subsidiary of EA, will pay 604p a share in cash for the motor racing computer games company. The price is 14.4% more than the 528p value of Take-Two's cash and shares bid, which Codemasters accepted on 10 November.
The offer is 72.6% higher than Codemasters' closing share price on 22 September, the date of Take-Two's initial approach.
EA has gatecrashed its smaller US rival's deal to buy Codemasters' racing games franchises, which include Formula One and Dirt. With a market value of about $40bn, EA is one of the world's biggest video games companies and its games include Fifa soccer and Need for Speed.
Codemasters said EA's offer was better value for its shareholders and scrapped its recommendation of Take-Two's £759m offer. Some Codemasters shareholders were reported to be unhappy about the size of Take-Two's bid and the share component amid a boom in gaming during the Covid-19 crisis.
Codemasters' shares rose 18.8% to 634p at 08:27 GMT, suggesting some investors think a higher offer could emerge for the company. Take-Two, which makes Grand Theft Auto, said it was considering its position and would make a further announcement when the time is right.
Gerhard Florin, Codemasters' chairman, said: "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."
Susannah Streeter, an analyst at Hargreaves Lansdown, said: "The pandemic has caused another major surge in the popularity of gaming. It's a $1.2bn gamble for Electronic Arts but platforms are hungry for new content and EA will be hoping to capitalise on a fresh pipeline of production through Codemasters and its subsidiaries.''
14 Dec 2020 08:05
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