• Mark Watson-Mitchell

Codemasters (LON:CDM) – give us a clue, is another bidder in the wings?

The world-leading racing games publisher Codemasters, which has been in business for some thirty years, could soon lose its independence if the bid from Take-Two Interactive Software goes ahead.


That US company Take-Two believes that the combination of Take-Two and Codemasters would bring together two world-class interactive entertainment portfolios, with a highly complementary fit between Take-Two's 2K publishing label and Codemasters in the racing genre.


The bidder considers that it can boost Codemasters' performance by leveraging Take-Two's global distribution network and 2K’s core operating expertise in publishing, including live operations, analytics, product development, and brand and performance marketing.


The bid values the Codemasters shares at 485p each, through offering 120p cash and 365p worth of Take-Two shares in exchange for control.


There are many professional investors in the City that consider that the current bid undervalues Codemasters and they anticipate a higher offering to actually secure the takeover.


It would appear that Ubisoft Entertainment has just issued a €600m Eurobond. I am informed that that the French gaming giant has stated that the net proceeds of the bond will be used for general corporate purposes as well as potential future acquisitions.


The shares are currently trading at around the 482p level. That is a clear gain of 114% in 17 months – beats having your money on deposit.


I have absolutely no idea what is the right thing to do – hold or sell? Probably best to hold on for more action to come, which I feel sure is very possible.



(Profile 25.06.19 @ 225p set a Target Price of 278p*)