Three people familiar with the matter said the announcement could drop as early as Monday unless something unexpected trips it up. The bid would value EA at $50 billion, they claimed.
The investor gang includes Saudi Arabia’s Public Investment Fund, private equity bruiser Silver Lake, and Affinity Partners, the investment outfit run by Donald Trump’s son-in-law Jared Kushner.
EA has about 700 million user accounts and a bulging library that includes EA Sports FC, Madden NFL and Battlefield. The cocaine nose jobs of Wall Street’s favourite fixer JPMorgan is cobbling together more than $20 billion in debt financing, the sources added.
That would make it bigger in dollar terms than the $45 billion buyout of Texas utility TXU in 2007, which didn’t end particularly well.
Silver Lake has been throwing money around having just taken Endeavor private, the talent and sports mob that owns the Ultimate Fighting Championship. It is in the mix for carving off TikTok’s US operations from ByteDance in a deal blessed by Trump’s lot.
Kushner’s Affinity Partners only launched in 2021 after he left Washington, but it quickly hoovered up more than $4 billion, mostly from PIF and other Middle Eastern backers. Kushner had earlier greased the wheels for the Abraham Accords while serving as one of Trump’s top advisers.
PIF is already one of EA’s biggest shareholders. The sovereign wealth fund controls more than $925 billion in assets and has been flinging cash at gaming. Its Savvy Games unit snapped up Pokémon Go in a $3.5 billion deal earlier this year.
Shares in EA leapt 15 per cent to $192.83 after word of the deal leaked, giving the company a market cap of around $48 billion. The stock had already risen 17 per cent this year before the latest jump.
Silver Lake, Affinity Partners, PIF and EA all kept schtum, while JPMorgan wouldn’t comment.
Some lenders are already queuing up. “It’s the perfect time to do this deal,” one enthusiastic financier said. “Markets are at all-time highs. There’s so much demand for paper. This is it,” he added.
The move comes as the gaming business struggles to replace the Covid boom years. EA’s latest results showed virtually no year-on-year revenue growth.
Some industry bosses reckon generative AI might cut development costs that currently run into hundreds of millions for blockbuster titles. That could make EA’s new private equity owners rub their hands in glee.
Two years after Microsoft’s $75 billion Activision Blizzard takeover, EA remains one of the last big beasts outside China, alongside Grand Theft Auto publisher Take Two Interactive. Its line-up of annual sports and shooter franchises still makes serious money.
But the old model of charging $70 a pop for a disc has been undercut by free-to-play hits such as Roblox and Fortnite. EA has scrambled to bulk up its so-called live services, which now make up almost three-quarters of its net bookings.