The Wall Street Journal's late Friday afternoon report, detailing the largest leveraged buyout (LBO) ever, which would take Electronic Arts (EA) private by private-equity giants, was confirmed by the video game company on Monday morning.
Here is the deal overview for the gaming company that owns EA Sports FC, Madden, and The Sims:
Financing & Structure Equity:
Timeline and Approvals Expected close:
Notable quotes from EA leadership and PE firms:
Here's what some of Wall Street's top desks are saying (courtesy of Bloomberg):
Bloomberg Intelligence
- Electronic Arts' potential take-private deal "is priced at an 80% or more premium vs. multiples of global game makers," though it "looks fair compared with Take-Two, especially given EA's potential profit beats in 2026-27 and IP treasure trove"
Citi (neutral)
"We believe this offer likely puts a floor underneath EA but not a ceiling," although a competing bid is unlikely
"If Battlefield 6 does particularly well, investors may seek a higher offer price"
Benchmark Co. (buy, PT to $250 from $200)
- "While the bid highlights the strategic value of EA's portfolio, we view the timing as premature, effectively crystallizing value before the market can assess the potential of Battlefield 6 and the broader Battlefield cycle"
Baird (outperform, PT $170)
"A deal could make sense given the company's attractive FCF profile, and with likely opportunities to bring more efficiency to the organization and optimize the title slate"
Baird suspects the board "would be open to a deal, and recognize other suitors could emerge (financial or strategic buyers), given the robust video game M&A environment, and with key EA titles FC and Battlefield now hitting the market"
Jefferies (buy, PT $200)
"We view PIF and Silver Lake as sensible buyers for an LBO of EA, but the ~20% takeout premium implied in the $50B deal is smaller than would be expected," although "we don't see any obvious alternative buyers given big tech companies will likely remain more focused on AI capex investments"
In New York, shares extended gains from Friday, up another 5.5%, nearing the $210 level.
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