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Jamdat Investor Sues EA

Posted by Zonk on from the must-have-read-EA-widow dept.

As a follow-up to the announcement that Jamdat was being purchased by powerhouse Electronic Arts, Gamespot has the news that a Jamdat investor is suing to stop the business deal. From the article: "While Wedbush Morgan Securities analyst Michael Pachter said EA 'bought Jamdat for a fair price if they intend to get big,' some questioned the premium paid to become an instant player in the growing mobile market. Piper Jaffray's Anthony Gikas said the $680 million figure was actually $200 million too high. Even so, Gikas favored EA's purchase in a note to investors, telling them, 'don't sweat the small stuff.'"

10 comments

  1. I Wonder by thebdj · · Score: 2, Interesting

    Does the person actually have a viable case here? The prices of Jamdat's stock did go up after the sale announcement to nearly the price per share they were going to pay. I am also wondering if Jamdat was offering themselves up or if EA just came in with an offer at random.

    If the latter is true, then he might have a bit more of an argument because it looks like the company saw the dollar signs and took the money and ran. At that point they probably should have started telling some other possibly interested peoples of the offer and see if anyone was going to counter.

    If the first is true, then I would imagine that Jamdat fielded a great many offers from different companies and got several figures before settling on EA's. While this does not necessarily mean they accepted the highest offer, it does mean they attempted to find out how much the company was worth to other individuals and not just blindingly accepting EA's offer.

    --
    "Some days you just can't get rid of a bomb."
    1. Re:I Wonder by Threni · · Score: 1

      > At that point they probably should have started telling some other possibly interested peoples
      > of the offer and see if anyone was going to counter.

      Anyone can offer to buy the company. Anyone can mount a hostile takeover against the wishes of management and shareholders.

      And what's a "fair price"? It's impossible to put an accurate price on a company - there are too many variables, and the market is changing all the time. This case won't succeed.

    2. Re:I Wonder by Red+Flayer · · Score: 2, Insightful

      "Does the person actually have a viable case here? The prices of Jamdat's stock did go up after the sale announcement to nearly the price per share they were going to pay."

      That was because of the announcement. Of course people would buy for under EA's price, when they know they are going to be able to sell at EA's price.

      This happens every time a company announces they are buying another company. The price on outstanding shares of the company being bought rises to about the level of the buy announcement.

      --
      "Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
  2. Frontpage Material by ObsessiveMathsFreak · · Score: 1, Interesting

    This is ./ frontpage material. The near complete lack of comments shows just how little the average games section frequenter actually cares about mergers and hostile takeovers. It would be nice if there was a way of moving this to the YRO section at the very least.

    I mean, this story is far more industry and legal based than it is about games.

    --
    May the Maths Be with you!
    1. Re:Frontpage Material by Lehk228 · · Score: 1

      it is also entirely unrelated to rights online.

      --
      Snowden and Manning are heroes.
    2. Re:Frontpage Material by ObsessiveMathsFreak · · Score: 1

      it is also entirely unrelated to rights online.

      Investors sueing to stop a takeover of a tech company. Slashdot doesn't have a legal section, but the YRO section is the proper home for a story of this kind. The games section is not, depite the fact that it involves two game industry companies.

      --
      May the Maths Be with you!
    3. Re:Frontpage Material by Lehk228 · · Score: 1

      it barely belongs on slashdot at all, however the closest fit would be the games section, as the effects of the merger and lawsuit would be relevant to some gamers

      --
      Snowden and Manning are heroes.
  3. Muja Muja! by Anonymous Coward · · Score: 1, Funny

    EA annouces merger with GNAA!

  4. Which one is more evil? by Anonymous Coward · · Score: 0

    This is the JAMDAT that basically screwed people out of thier money on the mobile phone. It and other mobile providers have basically killed any serious mobile gaming in Europe (and certainly Ireland).

    Basically you would connect to pay/download and play a game, only to find you have been added to a monthly (sometimes weekly) charge with it being almost impossible to cancel. I know of numerous people who had to throw thier simm away and get a new one because companies like Jamdat would suck the cash right off it.

  5. Big company buys Small company with expertise by Anonymous Coward · · Score: 0

    It's perfectly reasonable to think that EA would purchase JAMDAT.
    And, if the price is good, why would they need to entertain other offers?

    I know many companies in the Mobile industry that are angling to
    be purchased by larger companies. My conpany's areas of expertise
    include Multiplayer Technology and 3D engines that run across many of
    the older handsets. Getting apps to run on many phones is not as
    simple as it seems. And many of us have been doing this for
    several years. And it has value.

    Jeff Miller
    Four Corners Development Group
    www.fcdg.biz