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Default Take 2 Interactive - EA Takeover Update

March 26th, 2008, 20:29
For those following the ongoing attempt by Electronic Arts to purchase GTA franchise creator Take2, Gamesindustry.biz has two articles updating the situation and speculating on the studio's fate. In this one, Take 2 opens door to third party offers, they report the latest developments:
Take-Two has said that following EA's USD 26 per share offer to buy the company it has received interest from a number of third-parties, and is now opening it doors to discussions with all interested companies.
Take-Two's board of directors has unanimously dismissed Electronic Arts' offer to acquire the struggling publisher and it is now seeking alternatives to maximise the value of the company for the shareholders, which may include acquisition or business partnerships.
"The board has commenced a process for considering strategic alternatives in order to be prepared to engage in discussions with any parties, including EA, interested in a strategic business combination following Take-Two's release of Grand Theft Auto IV," said the company in a statement.
"The company has received indications of interest from third parties with respect to possible business combination transactions involving the company since EA's announcement, but no substantive discussions have yet occurred," detailed Take-Two.
And in this article, Michael Pachter, analyst at Wedbush Morgan says he believes Take2 is unlikely to find a better deal:
Take-Two's continued rebuttal of EA's offer to buy the company for USD 26 per share is a mistake according to Wedbush Morgan, with the analyst firm suggesting that the company will not be worth more following the release of Grand Theft Auto IV next month.
Wedbush believes that Take-Two could have got a higher price from EA had it worked cooperatively instead of dismissing the offer as "inadequate", and that the board has "virtually no chance of finding a better offer."
"In our view, Take-Two's board has made a mistake," said Michael Pachter, analyst at Wedbush Morgan.
"We believe that the company was positioned to extract a higher offer from EA by offering a friendly transaction, and its board chose to continue its adversarial posture. We do not mean to suggest that EA's offer was intended as a friendly one, but note that it started out as such, and EA turned hostile only after its first two friendly offers were summarily rejected.
"We think that Take-Two's position that the company will have greater value after the release of Grand Theft Auto IV is naive at best, and disingenuous at worst…."
Pachter also called Take-Two's bluff with respect to the company suggesting that it has received interest from other third-parties…
"The EA offer has been public for 31 days, and we believe the company is not in discussions with any other party," offered Pachter.
"This deal, in our opinion, makes more sense for EA than for any other company, primarily because of the synergies from consolidation of the two companies' sports businesses.
"No other company is in the position to realise those synergies, which we believe are substantial," he added.
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