Could EA Mobile buy Glu?

There have been persistent rumours about Glu Mobile (NasdaqGM: GLUU) being the subject of an acquisition in recent weeks, buoyed by its market cap of less than $24 million.

One rumour we've heard several times is that Indian publisher Jump Games is keen to splash its cash by buying Glu, but financial website Seeking Alpha has another idea: it says Electronic Arts (NasdaqGS: ERTS) may be mulling an acquisition of its rival.

The report suggests that EA's desire to bolster its mobile activities in Asia may be the cause, implying that Glu's MIG Entertainment subsidiary in China is the main selling point.

"Over the past week, rumours again began to surface that Electronic Arts management was considering an acquisition to bolster their mobile gaming presence in Asia," says the report.

"Around the same time, money apparently started to flow into Glu stock. During a week (last week) that saw the Nasdaq fall substantially, Glu Mobile's stock traded 65 per cent higher on more than double its normal trading volume, including a Glu move 15 per cent higher during the Nasdaq's big sell off on Friday while trading more than 200 per cent of normal daily trading volume."

Of course, any acquisition of Glu by EA could also be seen as a defensive move, to ensure that Jump or any other firm could not quickly scale up to offer serious competition to EA Mobile and Gameloft at the top of the mobile market.

Or, as Seeking Alpha puts it: "Even if ERTS offered a premium of 400 per cent to the current market price of GLUU's shares, they would still be taking down the number 3 player in mobile gaming for around one third of the valuation awarded the company's shares following its IPO just over a year ago."

There's no doubt that EA can afford to buy Glu, but would it want to? EA is currently going through a wide-ranging company restructure of its own, while facing executive changes in its European mobile arm.

Watch this space...