Formula One video game developer Codemasters accepts £726m Take-Two buyout deal

Kumutha Ramanathan
·2-min read
This photograph taken on November 25, 2019, shows member of the esport team Vitality, Jarno Opmeer (R) of the Netherlands and Renault Sport Academy Driver Max Fewtrell as they demonstrate their skills on the official esport F1 video game, at the Formula One motor racing Renault F1 Team headquarters in Enstone. (Photo by Philippe LOPEZ / AFP) (Photo by PHILIPPE LOPEZ/AFP via Getty Images)
Two players demonstrate their skills on the official F1 video game. Photo: Philippe Lopez/AFP via Getty

UK game maker Codemasters (CDM.L), best known for the Colin McRae and official Formula 1 racing games, announced on Tuesday that it accepted a cash-and-stock deal with Take-Two Interactive Software Inc. (TTWO) worth £726m ($956m).

The deal values Codemasters at 464 pence per share based on Take-Two’s last closing price, according to a company statement. The companies negotiations over the past few weeks have been reported on after talks were leaked to the press.

Take-Two is a developer, publisher and marketer of interactive entertainment for consumers around the world. It is best known for Grand Theft Auto, Red Dead Redemption and NBA 2K. Take-Two is listed on the NASDAQ with a market capitalisation of approximately $18.4bn.

“Take-Two believes that it can bring benefits to Codemasters' performance by leveraging Take-Two's global distribution and marketing infrastructure, together with Take-Two's core operating expertise in live operations, analytics, product development, and brand and performance marketing,” the US company said in a statement on Tuesday.

For every share they hold, Codemasters investors will get 120 pence in cash plus 0.02834 shares of Take-Two.

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“With a leading position in sports gaming, the Board of Codemasters firmly believes the Company will benefit from Take-Two's broad capabilities which will help propel the long term success of Codemasters.” said Gerhard Florin, chairman of Codemasters, in reaction to the deal announcement.

“In recommending this Offer to shareholders, the Board of Codemasters believes it is in the best interests of all stakeholders in the Company. Take-Two's offer reflects the great work the management team has done since listing on AIM in 2018 at 200p and delivers an excellent return for shareholders in just two and a half years," he continued.

Codemasters shares fell 4.8% to 455 pence at 2:45pm in London trading on Tuesday. Take-Two shares were trading lower by 3.5% at $154.21 in early trading in New York on Tuesday.

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