Wednesday, September 23

Rumor: Microsoft to Buy EA?

Rumblings of a Electronic Arts takeover by Microsoft have driven Wall Street into a frenzy this morning.

Reuters is reporting "unsubstantiated talk" of a possible sale, causing shares to jump for both companies. Electronic Arts saw a jump of over 8% to $20.01, while Microsoft's shares increased 1.1 percent to $26.05

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said options strategist Frederic Ruffy.

Analyst Trip Chowdhry said talk of this sale is unjustified. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now."

Electronic Arts and Microsoft have yet to issue any comments on this story.

Wedbush Morgan analyst Michael Pachter told IGN a sale of this magnitude is highly unlikely.

"Their value as a one platform exclusive publisher is lower than their value on multi-platform. A media company would pay a lot more," he said. "Also, most licenses would terminate."

Deus Legend's Take: I really don't see this deal happening. Its all talk and will be a bad deal for both sides. There is also a rumor about EA wanting to buy THQ which will make a lot of sense. More on that here.


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