Zynga Offered $2.25 Billion Deal to Buy 'Angry Birds' Owner (Report)
NEW YORK - Social gaming giant Zynga, which has filed for an IPO, this summer offered to acquire Angry Birds maker Rovio, but a deal never materialized, the New York Times reported.
It said the deal would have valued Rovio at roughly $2.25 billion in cash and stock.
In July, Zynga also failed to seal another deal to buy mobile game firm PopCap for $950 million in cash. Electronic Arts won the bidding for the firm by offering a higher potential total - $750 million in cash and stock plus the potential of an additional $550 million if certain financial targets are met. But the Times said that PopCap founders also expressed concern that Zynga was rescinding share awards and had a culture of fierce internal competition.
With its IPO expected by year's end, the hard-driving Zynga may face a brain drain, the Times suggested, reporting that competitors are preparing to poach disgruntled Zynga staff, with one recruiting firm sending cookie baskets to 150 employees this month.
The company, whose Facebook games include Mafia Wars and CityVille, itself has hired talent from Electronic Arts and various other gaming firms.
Zynga has long emphasized it is a meritocracy, so the fact that staff works long hours and managers track performance and get rid of weaker performers may not come as a surprise. But the Times said the internal competition and hard-charging approach may make it tougher for Zynga to retain talent.
Zynga CEO Mark Pincus last month acknowledged e-mails from frustrated staff complaining about long work hours and stressful deadlines, promising to address concerns, the Times said.
At a meeting, Pincus read some of the toughest criticism from a regular employee survey, saying he was aware of the problems and asking for guidance to fix them, it said. Among the complaints was one from a person who said he planned to cash out and leave after the IPO, according to the Times.
"Zynga should be an example of entrepreneurship at its best," Roger McNamee, a co-founder of venture capital firm Elevation Partners told the Times. "Instead it's going to be a Harvard Business School case study on founder overreach - this will be a cautionary tale."
"I expect a lot of game and tech companies will begin recruiting Zynga's talent after their equity becomes liquid," said Gabrielle Toledano, head of human resources for Electronic Arts.
Zynga declined to comment, citing the quiet period before its IPO.