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**$50B** EA LBO would be largest software take-private in two years; stock pricing **80%** deal odds, leaving **12%** upside if terms confirm.
15%
higher on reports the Redwood City gaming publisher is…
$50 billion
leveraged buyout to exit public markets
$61 billion
in 2023 and the second-largest gaming sector transaction on…
$6.5 billion
to market capitalization in a single session
Electronic Arts closed 15% higher on reports the Redwood City gaming publisher is nearing completion of a $50 billion leveraged buyout to exit public markets. The move, if confirmed, would mark the largest software sector take-private since Broadcom absorbed VMware for $61 billion in 2023 and the second-largest gaming sector transaction on record.
The stock closed at $168.42, adding $6.5 billion to market capitalization in a single session. CNBC reported the deal structure involves a consortium led by private equity, though specific sponsors remain unnamed. Electronic Arts declined comment. Trading volume reached 47 million shares, 4.2x the thirty-day average. Options skew tilted sharply bullish, with $170 strike calls expiring January 2026 trading at $18.50, implying expectations the deal closes above $188 per share.
The timing follows eighteen months of operational restructuring under CEO Andrew Wilson, who cut 6% of workforce in February 2024 and shuttered three live-service titles that failed to meet retention targets. Annual revenue stands at $7.4 billion, down 2% year-over-year, while operating margin expanded to 21% from 18% as the company shed unprofitable franchises. Free cash flow reached $1.9 billion in the trailing twelve months. The Madden and FIFA (now EA Sports FC) franchises generate 43% of revenue, Ultimate Team mode microtransactions contribute 29%, and legacy catalog titles account for the remainder.
A $50 billion enterprise value implies 6.8x trailing revenue and 26x free cash flow, a 22% premium to the 5.6x revenue multiple EA traded at before the report surfaced. Comparable public gaming publishers Activision Blizzard and Take-Two Interactive trade at 5.2x and 6.1x revenue respectively. The premium reflects the LBO structure's tolerance for leverage and the strategic value of EA's sports licensing moat, particularly the exclusive NFL partnership that runs through 2026 with renewal options.
Allocators should watch three developments. First, formal announcement timing and sponsor identity, expected within two to four weeks based on regulatory filing patterns for deals of this scale. Second, the debt package structure—a $50 billion valuation likely requires $30-35 billion in leveraged financing, which would test current appetite for large software LBOs given rising benchmark rates. Third, the NFL licensing renewal negotiation, which EA must close before deal consummation to preserve valuation. Any indication the league is exploring competitive bids would compress the premium.
The $6.5 billion single-day market cap increase now prices in 80% deal probability at current levels. If the transaction collapses, reversion to pre-report levels near $146 would erase gains within 48 hours. If it closes, the $188 implied price from options markets suggests 12% additional upside from current levels, though that spread narrows as formal terms emerge and arbitrage capital enters.
Branded by POPS4 · proof in 60 seconds
For the principal
Monitor NFL licensing renewal timeline—deal structure likely contingent on multi-year extension closing before transaction finalizes by Q2.
For the operator
Options market pricing $188 close; current $168 offers 12% spread trade if sponsor names and debt package confirm within four weeks.
For the house
Named account holds $14M EA long via March $175 calls; maintain pending sponsor disclosure, exit if debt package exceeds $35B.
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