Electronic Arts has withdrawn its $2 billion tender offer for Take-Two Interactive, publisher of GRAND THEFT AUTO, to enter into private negotiations, per VARIETY. This move comes six months after the public battle started.
EA received little interest in its bid of $25.74 per share, which due to the success of the latest GTA title, has been lower than Take-Two's trading price some days this summer. EA let the offer expire at 12 a.m. Monday.
In a letter to Take-Two exec chairman Strauss Zelnick on Monday, EA head John Riccitiello said their reason for withdrawing the offer had to do with incorporating GTA IV into EA's holiday game slate, which is no longer possible.
"We continue to have great respect for Take-Two’s creative teams and products and are hopeful that we can work together to reach a mutually agreed transaction," wrote Riccitiello.
Zelnick responded in a statement that he and Take-Two's board believe EA's bid undervalued the company, but they welcome including EA in their process to determine strategic alternatives, including acquisitions. Take-Two is apparently talking to several would-be buyers or partners both in videogame publishing and traditional media companies.
Zelnick, in a letter sent to Riccitiello on Sunday, said the process would start with a presentation to EA management that includes confidential information on Take-Two's three-year release plan and financial projections. "I believe our presentation will enable you to better understand the value of our company to EA," he wrote.
The agreement apparently came about during a phone call Friday, and could be a precursor to a new acquisition agreement for a higher price than EA has offered. The deal would first need approval from the Federal Trade Commission, which is currently reviewing the situation. It should finish its investigation by Thursday, including a look at the two publisher's similar sports videogame lines.
EA first made its unsolicited bid last winter, soon after Zelnick and his team took over Take-Two. They started the current process last December, with Riccitiello making increasing offers that were rebuffed by Take-Two before EA went public with the bids in February. EA went hostile in March.
The acquisition would give EA one of the biggest wholly owned franchises in the videogame business in the GRAND THEFT AUTO line. GTA is made by Take-Two subsidiary Rockstar Games. The deal would also eliminate one of EA's biggest sports game competitors.