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Nexon makes a bid for Electronic Arts (Rumor)

Andrew Lee Apr 27, 2012 0

 

Image courtesy of Joystiq

Electronic Arts shares are trading higher Thursday morning on a report that said the South Korean online game company Nexon has made a bid for EA according to a South Korean newspaper.

This recent rumor comes from a Thursday morning Bloomberg report and other social media.  EA and Nexon both have issued statements saying they do not comment on rumor or speculation.

Nexon is a large online game company with more than 3,400 employees based in Korea, US, Japan, and Luxembourg. Nexon pioneered the free-to-play business model for online games that many companies are quickly adopting for their games.  Nexon’s games, mostly played in Asia, are more immersive and complex than your typical “FarmVille.”  The company makes money by charging for virtual items and experiences in its games.  In 2011, it earned 25.7 billion yen ($256.9 million) and revenue of 87.6 billion yen ($1.13 billion).

EA shares are responding to the rumor as shares have spiked $1.22, or 8.1%, to $16.23. Stocks have been trading close to a 52-week low, as EA continues to struggle through a transition to switch more of its business to digital distribution and away from the traditional shrink-wrapped console game market.

Nexon is larger than EA but not by much. EA’s market cap is about $5.3 billion. Nexon, which trades on the Tokyo Stock Exchange, has a market capitalization of about $8.5 billion. With that said, if Nexon attempts to acquire EA, its going to be a tough battle.

Via »Forbes