Shares of Zynga (NASDAQ: ZNGA) jumped more than 8% Wednesday on rumors that the social games maker is buying rival OMGPOP, maker of the wildly popular "Draw Something" and self-proclaimed home of "the bestest multiplayer games." San Francisco-based Zynga has scheduled a "news announcement" for 3 p.m. ET, but All Things Digital's Peter Kafka is ruining the company's surprise by blowing the lid off the deal:
It's a done deal, according to people with first-hand knowledge. Here's more detail on the price: $180 million plus another $30 million or so in employee retention payments, I'm told. Don't know about cash/stock split.
Founded in 2006 by Charles Forman and based in New York, OMGPOP has a staff of about 40. Its "Draw Something" game recently surpassed Zynga's "Words With Friends" to become the top social game on Facebook. Zynga has been criticized for publishing games its critics argue are highly derivative of competitors'. At least now it probably won't be accused of ripping off "Draw Something." The company's stock on Wednesday reached as high as 14.48, or 8.1% above Tuesday's close of 13.39, before receding back to 14.26 prior to the afternoon press conference. Zynga's initial public offering in mid-December was disappointing as shares finished the first day at 9.50, below the $10 offer price. But in late January, rumors began that Facebook would be filing to go public. This pushed Zynga shares over $10 for the first time since the IPO. The stock got another boost on February 1 when Facebook filed its S-1 with the Securities and Exchange Commission, revealing that the social networking giant derives 12% of its revenue from Zynga. By mid-February, shares had climbed over $14.
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