Videogame maker Electronic Arts for sale?
The New York Post reported that KKR and Providence Equity Partners have contacted the American gaming company about a potential acquisition.
The report cites an anonymous source who says the negotiations are in the "early days." The paper also quotes a source as saying EA would do a deal at $20 a share-EA sold shares at that price this past January.
One of the companies involved, Providence Equity Partners, became a major investor in Bethesda Softworks' parent company Zenimax Media in 2007. ZeniMax is known as the owner of id Software the developer of the Doom and Quake franchises.
EA is the maker of such popular video games as SimCity and Madden NFL and closed on Aug. 16 at $13.81 a share. The gaming company's market value is $4.17 billion.
Video game software revenues at retailers in the U.S. dropped 26 percent to $585.1 million in March and hardware sales experienced a greater decline of 35 percent during the same period.
EA hasn't been able to escape this industry wide drop in sales and last month reported that fiscal first-quarter earnings fell 9 percent as the company's core revenue slipped.
EA has had mixed results with games in recent periods, the company's expensive online game, Star Wars: The Old Republic, hasn't performed as well as expected and is switching to a free to play format after only 9 months on the retail market. The company's big release in the first quarter of the year, Mass Effect 3 has sold well and has out paced its predecessors.
The publishing giant is looking to transform its business model and expects revenue from digital downloads of its games to overtake sales of boxed game software within a few years.
What do you think of EA's potential sale?