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

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EA Said Actively Pursuing Sale or Merger, Comcast and Amazon Among Potential Suitors; Stock Now 'Likely Has a Floor' Analyst Says
Credit: © Reuters.

By Vlad Schepkov

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 20, 2022, claims that EA's CEO Andrew Wilson and Electronic Arts "have held talks with a number of different potential suitors, including Disney (NYSE: DIS ), Apple (NASDAQ: AAPL ) and Amazon (NASDAQ: AMZN )," 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 (NASDAQ: ATVI ) got acquired by Microsoft (NASDAQ: MSFT ) for $69 billion, while Take-Two (NASDAQ: TTWO ) picked up Zynga (NASDAQ: ZNGA ) for $12.9 billion. Still, Jefferies analyst Andrew Uerkwitz notes that "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, he believes "Electronic Arts Inc's stock likely has a floor given the possibility of a deal," as he reiterates a “Buy” rating on the shares of the famed video maker.

EA is climbing over 4% higher in Monday’s early trade.

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