Buyout Rumors – EA and THQ

I don’t like posting stories about rumors because they are often false or very inaccurate. These rumors deal with two very large publishers in the industry so I thought I’d make an exception.

The first rumor is that THQ will possibly be bought out by a large company such as Time Warner or Viacom. This rumor seems plausible as THQ’s stock price has been deteriorating for a while as the company has reported losses for the past couple of years. In addition, they’ve spun off internal development studios such as Heavy Iron and Big Huge Games.

The other rumor seems very unlikely, which is that Microsoft might be interested in buying Electronic Arts. Reuters posted comments from two financial analysts who downplayed the suggestion:

"There’s talk that Microsoft might be interested in acquiring Electronic Arts. It’s unsubstantiated chatter, but it’s out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft’s "radar screen" based on his industry contacts.

"Our contacts just don’t see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft’s corporate primary focus right now," Chowdhry wrote in an e-mailed note.