Electronic Arts to buy Glu Mobile in $2.4B deal

Yahoo Finance's Jared Blikre joined Yahoo Finance Live to discuss Electronic Arts buying Glu Mobile.

NOTE: GLUU was halted for trading around the release of the transaction news and was up 43% in after hours trading subsequent to the resumption of trading.

Video Transcript

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SEANA SMITH: Going to get to some breaking news here involving Electronic Arts. Jared Blikre, what can you tell us?

JARED BLIKRE: Yeah, so Electronic Arts is buying Glu Mobile in a $2.4 billion equity value deal. So they're actually going to be paying $12.50 in cash for each share of Glu. And this represents a 36 premium to Glu's closing price on February 5th. That would be last Friday.

Now some other terms in the deal that have been announced. Both companies boards have approved the transaction and the Glu board recommends that Glu stockholders approve the transaction and the adopted merger agreement. Now, this is a company that has a number of products, including one for the Kardashians. I'm not completely familiar with it. I must tell you that.

But if we take a look at the YFi interactive we can see that EA is now up 1.72% on the news. And here is Glu Mobile. Now, I haven't seen a quote for it yet. This is a fairly thinly traded stock, so not surprising to see it's not really moving in the after hours just yet. But I would guess on the open tomorrow it would be reflecting that 36% premium.

Also, the enterprise value of the transaction is $2.1 billion and it is estimated to close in the second quarter ending June 30th here. And just taking a look at the EA stock here, and if it's in the Glu, it's going to be in the game, right? Over the last year, up 30%, guys.

SEANA SMITH: Jared, I'm surprised you're not familiar with Kim Kardashian's Hollywood game, but I guess you can fill that-- fill us in on that next time, right?

JARED BLIKRE: I got so much reading to do tonight.

SEANA SMITH: Jared Blikre, thanks so much for that breaking news.