There's talk that South Korea-based Nexon is offering a bid to take over Electronic Arts.
Looks like someone wants to take over Electronic Arts, and believe it or not, EA stocks are now soaring because it.
South Korean free-to-play MMO publisher Nexon is reportedly talking with Electronic Arts about a potential acquisition. Nexon is a rather big deal over in the East, publishing favorites like Maple Story, Mabinogi, Atlantica Online and Combat Arms which are playable worldwide.
Forbes reports that Nexon, which is currently headquartered in Tokyo, Japan, has seen rapid growth in recent years. It's expecting 2012's revenue to be up 25-percent to $1.4 billion, and profits to rise 53-percent to almost $500 million. The company even raised $1.2 billion last year in Japan's biggest IPO in 2011, and just last week announced that it's looking to purchase mobile game developers.
"There are a lot of good mobile-game developers [being considered for acquisition in Japan]," Nexon Chief Financial Officer Owen Mahoney said in an interview. "The industry is moving in our direction. We’d like to buy teams in intellectual properties early in what we consider to be their total lifetimes and then grow them."
So far there are no confirmations or details surrounding the possible buyout, but EA shares have spiked $1.22 USD, or 8.1-percent, to $16.23 per share. Up until just recently, EA's stock was trading close to a 52-week low as the games publisher struggles to move away from physical distribution to a more modern digital distribution.
EA recently reported a $205 million net loss in fiscal 3Q11 ending December 2011, but also recorded its highest operating cash flow in 31 quarters. During that quarter, EA generated $1.06 billion in net revenue, slightly up from the same quarter in 2010. EA's cash flow from operations was recorded at $475 million.
"We are pleased to report a strong holiday quarter driven by Battlefield 3, FIFA12 and a strong showing by our digital games and services," said Chief Executive Officer John Riccitiello. "Star Wars: The Old Republic is developing a committed community of players with more than 1.7 million active subscribers and growing."
A non-forced buyout will likely not happen based on EA's fiscal 3Q11 numbers alone. But Wedbush Securities analyst Michael Pachter also believes EA's CEO won't even consider handing over control to the overseas publisher.
"There are few, if any synergies, and no reason to believe that Nexon could run EA's assets more efficiently," he said. "Nexon shareholders would own a completely different company than what they bought in the December IPO."
Still, with stocks spiking over a possible buyout, it looks as if shareholders want a definite change to take place soon.