Electronic Arts (EA) Said Actively Pursuing Sale or Merger, Comcast and Amazon Among Potential Suitors; Stock Now 'Likely Has a Floor' Analyst Says

May 23, 2022 9:31 AM EDT

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Electronic Arts (NASDAQ: EA), a renowned video game publisher behind FIFA, Battlefield, Star Wars and countless other gaming franchises is actively pursuing a sale or a merger, according to a report by Puck.News.

An article published late Friday, May 20th 2022, claims that EA's CEO Andrew Wilson "and Electronic Arts have held talks with a number of different potential suitors, including Disney, Apple and Amazon", as the company "has been persistent in pursuing a sale."

Puck’s story further notes that EA had been deep into negotiations with Comcast’s (NASDAQ: CMCSA) NBCUniversal and its CEO Brian Roberts, who pursued the potential transaction intending to eventually spin off the entertainment business into a combined (with EA), newly formed company – before the talks stalled over price.

If true, a potential Electronic Arts deal likely won’t surprise the market considering recent “big-name consolidations” in the gaming industry: Activision Blizzard got acquired by Microsoft for $69B, while Take-Two picked up Zynga for $12.9B. Still, Jefferies analyst Andrew Uerkwitz believes "probability favors no deal over a deal for the next several quarters."

Commenting on potential buyers, he notes that "Disney and Apple 'make little sense to us,' while Amazon looks plausible”, and goes on to point out "Comcast spinning Universal into EA sounds very interesting, but likely much harder in reality vs. on paper."

Still, in his view "Electronic Arts Inc.’s stock likely has a floor given the possibility of a deal", and the analyst reiterates a “Buy” rating on the shares of the famed video maker.

EA is climbing over 3% higher in Monday’s early trade.

By Vlad Schepkov



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