Jamdat shareholder opposes EA buyout

Following the recent agreement with Electronic Arts for a USD 680 million acquisition deal, a shareholder of mobile game company Jamdat is seeking to prevent the closure of the deal by filing a class action lawsuit.

The acquisition agreement, which was announced last week, marked the biggest single consolidation move seen in the mobile gaming space to date as Jamdat was to merge with EA's existing mobile division.

Stocks in Jamdat soared by almost 19 per cent following the announcement, and certain analysts have placed the offer as exceptionally richly valued. In one instance, analyst Anthony Gikas of Piper Jaffray said Electronic Arts' proposed price was USD 200 million too high.

Shareholder Elliott Fox feels quite differently however, and has filed a lawsuit to prevent the closure of the deal - asking the courts to declare the acquisition agreement unlawful and unenforceable on the grounds of selling too low, at rates preferential to Electronic Arts.

Fox stated: "the proposed acquisition is the product of a hopelessly flawed process that was designed to ensure the sale of Jamdat to one buying group and one buying group only, on terms preferential to Electronic Arts."

Fox argues that Jamdat directors failed to secure the highest price for the sale of the company, and is seeking to halt the new deal; the single largest acquisition in Electronic Arts' history.