LONDON- Electronic Arts have outstripped one of its rivals with a $1.2 billion deal with UK video game creator Codemasters.
On Monday Electronic Arts (EA) said in a statement that it would pay $8.10 per share for the developer of racing games including DIRT and Formula One. That’s approximately 14% more than November’s share and cash offer from Take-Two Interactive Software.
Codemasters had initially agreed to be procured by Take-Two, but its board of directors has now abandoned that recommendation in favour of the affluent offer from EA. The Electronic Arts deal is expected to close in March 2021. EA is located in California, and best known for games such as FIFA and The Sims.
Andrew Wilson, the CEO of Electronic Arts, said that EA had praised Codemasters’ “imaginative talent” and games “for many years.”
“We think there is a deeply fascinating opportunity in bringing together EA and Codemasters to create innovative and amazing new racing games for fans,” as stated by CEO. “Our industry is expanding, the racing category is expanding, and together we will be orientated to lead in a new age of racing entertainment.”
Codemasters’ shares increased by 20% to $8.61 in London, indicating that some investors expect a counteroffer to take place. Take-Two did not instantly respond to a demand for comment.
Video game sales have increased during the lockdown as people spend more time at home, part of a larger trend that has profited tech companies that offer online shopping and digital services. Many people have become gamers this year, and more people begin watching gamers on services like Youtube and Amazon’s Twitch.
Surging sales and earnings have drastically increased investor demand for tech shares, and valuations are shooting up. The dynamic has been underlined by several recent IPO’s and deals.
Airbnb shares increased from $68 to $146 a unit in their debut last week, valuing the company at $100 billion. That means Airbnb is worth more than Hilton, Hyatt, and Marriot combined.
