Codemasters in talks to sell to New York video games publisher

Codemasters, the phenomenally successful British video game developer headquartered near Leamington Spa is in talks to sell to Take-Two Interactive Software, the New York-based developer, publisher and marketer of interactive entertainment for consumers.

Take-Two, which develops and publish products through labels Rockstar Games, 2K and Private Division, as well as Social Point, is a leading developer of mobile games.

It has offered a deal that values Codemasters at £739 million and the board of Codemasters says it intends to recommend it to its shareholders.

Take-Two said it believes that the combination of Take-Two and Codemasters would bring together two world-class interactive entertainment portfolios, with a highly complementary fit between 2K and Codemasters in the racing genre. The USA-based company believes that it can bring benefits to Codemasters performance by leveraging Take-Two global distribution and 2K's core operating expertise in publishing, including, live operations, analytics, product development, and brand and performance marketing.

However, while discussions are ongoing, there can be no certainty that a firm offer will be made.

Last month Codemasters issued a trading update for the six months ended 30 September 2020.

The Company expects to report revenue of approximately £80.5 million for the six-month period versus £39.8 million for the same period last year.

Digital sales as a proportion of revenue continue to increase, representing 73 per cent of total sales in the period as COVID-19 impacted the sales mix and accelerated the shift to digital delivery.

Trading in the first half of 2021 benefitted from the launch of F1 2020, Fast & Furious Crossroads, Project CARS 3, and continued sales of the Company's back catalogue of games - in particular F1 2019 and DiRT Rally 2.0.

The Company expects to publish its results for the six months ended 30 September 2020 on 23 November 2020.

Codemasters was established in 1986 by brothers Richard and David Darling. Now owned by the Indian-based  Reliance Big Entertainment, it floated on the London Stock Exchange in 2018. Reliance first acquired a 50 per cent stake in Codemasters in 2010, increasing its stake in the games developer to 60 per cent in 2013.

Take-Two has until December 4 to announce its firm intention to buy.