Electronic Arts, Take-Two Won't Merge
Created 09/14/2008 - 23:00
Six months later, Electronic Arts has ended its drive to buy Take-Two Interactive, per VARIETY. EA had been in private talks with Take-Two, but declined to make a new offer. It previously had made a $2 billion offer, which was repeatedly turned down by Take-Two execs and later their shareholders.
When asked Sunday why a deal wasn't reached, Take-Two exec chairman Strauss Zelnick said, "They made their tender offer numerous times while we have continued to beat our guidance and put out hit games, so you can draw your own conclusions."
EA CEO John Riccitello said previously he thought Take-Two was declining in value as the Christmas season, a lucrative one for the videogame industry, came closer, but were apparently convinced otherwise while in private discussions with Take-Two.
Zelnick also said Sunday that Take-Two is still in talks with several other undisclosed companies to work out a potential acquisition or strategic partnership. These companies are rumored to include both videogame publishers and traditional media conglomerates.
Because it is a relatively small company and has several very valuable properties in its GRAND THEFT AUTO, BIOSHOCK and sports franchises, Take-Two is a likely acquisition target in an increasingly consolidated videogame business.
EA began its pursuit of Take-Two in early 2007, just prior to Riccitello and Zelnick taking their respective jobs. Talks started up again in December, and when a deal couldn't be made, EA took its bid public in February and turned it into a hostile tender offer in March.
A shareholder approval was extended five times, through August, but interest was not there. Afterward, EA went back into private discussions, which ended this past weekend.
EA, which is the largest third party videogame publisher outside of Japan, was interested mostly in Take-Two's GRAND THEFT AUTO and 2K Sports, which is the biggest competitor to EA Sports.
EA is still on the lookout for acquisition targets: "I think you'll see us continue to be an acquirer around two strategic goals: developing a very strong core pipeline of games and expanding our direct-to-consumer and online strategy," said SVP of corporate strategy Owen Mahoney.
Take-Two, after a successful summer launch of the latest GRAND THEFT AUTO, is working on a Nintendo DS version that will be out later in 2008 or perhaps early next year, a sequel to BIOSHOCK for 2009 and an installment of its casual franchise CARNIVAL GAMES.