Overview

• Unnamed sources cited by the Wall Street Journal say a group led by Silver Lake and Saudi Arabia’s Public Investment Fund is negotiating to take Electronic Arts private at roughly a $50 billion valuation.
• EA shares were briefly halted after the report and then jumped roughly 14%–16%, lifting the company’s value toward the reported deal range.
• An announcement could come as soon as next week, though terms are still being discussed and neither EA, Silver Lake nor the PIF has publicly commented.
• A transaction at around $50 billion would surpass prior LBOs such as TXU/Energy Future Holdings in 2007, which was about $45 billion.
• Coverage notes EA’s pre-report market value was about $42–43 billion and highlights the PIF’s growing, controversial footprint in gaming investments.