Industry analyst, Michael Pachter, spoke with GI.biz as to why this buyout simply "cannot happen" and why it probably won't happen.
Reasons why Nexon's buyout of EA won't happen
1) The CEO will not give up control
2) EA shareholders won't take Nexon shares, because they would likely drop a ton when the float goes from $1.5 billion to $8 billion
3) EA management would recommend against an offer below $25 (where stock traded in October in a weaker market) and likely would reject an offer below $30
4) Nexon would be the acquirer, and would attempt to run a company with $6 billion in revenues that is in mobile, social, MMO and packaged goods, all things Nexon has never done before, at a size 4x their current size
5) EA management would NOT be in control, so the potential for a loss of key employees is huge
6) There are few, if any synergies, and no reason to believe that Nexon could run EA's assets more efficiently. Nexon shareholders would own a completely different company than what they bought in the December IPO
2) EA shareholders won't take Nexon shares, because they would likely drop a ton when the float goes from $1.5 billion to $8 billion
3) EA management would recommend against an offer below $25 (where stock traded in October in a weaker market) and likely would reject an offer below $30
4) Nexon would be the acquirer, and would attempt to run a company with $6 billion in revenues that is in mobile, social, MMO and packaged goods, all things Nexon has never done before, at a size 4x their current size
5) EA management would NOT be in control, so the potential for a loss of key employees is huge
6) There are few, if any synergies, and no reason to believe that Nexon could run EA's assets more efficiently. Nexon shareholders would own a completely different company than what they bought in the December IPO
To give you some background information, Nexon's current market cap is around $8 billion (USD), with the CEO owning over 50% of their stock. If Nexon did a stock-for-stock direct deal for EA at roughly $20 a share, Nexon would have to raise their market cap to $14 billion. The CEO that presently holds over 50% of the company stock would drop to only owning 30% of the combined two.
So yeah, probably won't happen.
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