UPDATE 1-Electronic Arts stock up on takeover talk-traders

Wed Sep 23, 2009 2:37pm EDT

(Adds analyst comment, updates share price)

NEW YORK, Sept 23 (Reuters) - Shares of Electronic Arts Inc ERTS.O jumped more than 8 percent on Wednesday on unsubstantiated talk that Microsoft Corp (MSFT.O) may want to buy the video game publisher, but an analyst poured cold water on the idea.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft's "radar screen" based on his industry contacts.

"Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," Chowdhry wrote in an e-mailed note.

Last year, Electronic Arts, the publisher of popular titles like "Madden" football, unsuccessfully pursued a buyout of rival video game company Take Two Interactive Software (TTWO.O).

The Redwood City, California-company, which has a market value of $6.5 billion, is frequently named by traders as a target for Walt Disney Co (DIS.N) and Time Warner Inc (TWX.N).

Electronic Arts' shares were up 8.1 percent at $20.01 in afternoon Nasdaq trading. Microsoft shares gained 1.1 percent to $26.05.

An Electronic Arts representative was not available for a comment. A Microsoft representative declined to comment.

On Tuesday, the stock of THQ Inc THQI.O surged 13 percent as rumors swirled that the smallest of the major U.S. video game companies might be the target of a takeover. Analysts said those types of rumors come up about once every quarter. (Reporting by Ellis Mnyandu and Anupreeta Das; Editing by Theodore d'Afflisio and Maureen Bavdek)

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