EA's Offer To Take-Two Gets Hostile
Created 03/16/2008 - 23:00
Take-Two Interactive's board has refused to accept Electronic Arts' $2 billion acquisition offer, so EA is turning hostile, VARIETY reports.
The largest videogame publisher went directly to the Take-Two shareholders on Thursday, offering them $26 per share.
The move wasn't surprising as EA had already revealed its offer to the public last month, an amount Take-Two executive chairman Strauss Zelnick said was too low.
EA's bid now represents a 64 percent premium over the last day of trading before the offer was first made.
EA head John Riccitiello told VARIETY his company could better market and sell Take-Two's properties, which include the GRAND THEFT AUTO franchise.
EA would allow Take-Two's development teams, like Rockstar Games, to continue to operate independently.
Zelnick has said the deal's timing is bad and the $2 billion offer is insufficient given the progress the company has made in the last year.
It has continued to lose money, but its share value has significantly increased and next month's GRAND THEFT AUTO IV is expected to be a big hit.
Take-Two's biggest mutual fund shareholders have sold off most of their stake in the company in recent weeks, a signal they think the $25-a-share price won't go much higher.
The deal is hinging on EA being able to buy a majority of Take-Two's stock.
Take-Two told shareholders in a statement on Thursday to "take no action" while it consults with independent financial and legal advisors.
An official response is expected to EA within 10 days, but given the board's past statements, it seems unlikely they will accept a deal at this point.