A shareholder in mobile game publisher Jamdat Mobile has sued over the reported terms
of the pending merger with Electronic Arts, claiming that Jamdat settled for too low a price in the deal. According to the current terms of the merger, EA will pay $680 million for the mobile games company.
Shareholder Eliot Fox alleged in his complaint with the Los Angeles Superior Court that "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's filed suit is a class action, according to a Reuters report, in hopes that other Jamdat shareholders will ally with him to declare the deal unlawful and unenforceable. Similar suits regarding valuation for game companies occasionally arise - last July, Milberg Weiss filed a suit against Majesco
alleging misrepresentation of the company's income and growth potential.
Despite Fox's claims, financial analysts have noted that EA is paying what is seen by them as a premium for Jamdat, with Anthony Gikas at Piper Jaffray estimating that EA overpaid by as much as $200 million for the mobile company. Should more analysts chime in with similar sentiments, it may be difficult for Fox to mobilize sufficient evidence in court to prove his claims.