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Default Take 2 Interactive - EA Takeover Update

March 26th, 2008, 21:29
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.
More information.
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March 26th, 2008, 21:29
If they want to be a responsible company then they made the right choice by not going with EA since buying them just gets them one step closer to becoming a monopoly which isn't good for the economy.
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March 26th, 2008, 23:03
So synergy is the new word for monopoly?
Though, I guess it's not that new…

But how come the anti-trust laws allow for such a takeover?
Or these cannot be applied for the video-game industry?
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March 26th, 2008, 23:36
Who says the anti-trust laws allow this takeover?
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March 27th, 2008, 00:36
An amazing analysis there, GTA IV sales will not effect the value of the company…
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March 27th, 2008, 01:36
Originally Posted by woges View Post
An amazing analysis there, GTA IV sales will not effect the value of the company…
That is sadly well analyized. The whole money T2 will make from GTA4 is already in the shares price of today, because shares are measured by expectations - not outcomes.

I don't think there will be a white knight for T2, because UBI and Atari are out of money and UBI is partly owned by EA already.

The only one who could be out there for them is a venture capital fund - nothing else.

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March 27th, 2008, 03:29
That's only if GTA IV does as expected… no idea what that is but I'm pretty sure that game is going to be rather well received and T2's shares rose by something like 10% on the release of Bioshock. Likewise if the game bombs the share prices will go the other way. So outcome will effect share prices to some extent though not to the amount EA is offering - though the fact that the company maybe undervalued may well be the reason EA would put in such an offer in the first place.
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March 27th, 2008, 18:41
In a currently running poll at the German magazine's site "Gamestar", 76 % call it "frightening", and believe that EA will squash all good games [and impicitely studios, too].

8 % say, it's Tak2's own fault, because they had too many "misses" in the recent time, and 16 % say that the business policies of EA will keep the independence of Rockstar and the Bioshock-developers intact.

I don't know whether this link works, but I got the results from here: http://www.gamestar.de/_misc/polls/poll.cfm?pk=7482

Edit: As I write this, it has already changed from 76 to 75 % and from 16 to 17 %. The 8 % remained untouched.

The poll began today.

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March 28th, 2008, 00:52
Originally Posted by Gorath View Post
Who says the anti-trust laws allow this takeover?
They just allowed the pairing of the only two satellite radio providers in the US … and their jurisdiction has to do only with overall competition in an industry, not whether they will broaden their screwing of a customer base

— Mike
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March 28th, 2008, 05:09
Originally Posted by txa1265 View Post
They just allowed the pairing of the only two satellite radio providers in the US … and their jurisdiction has to do only with overall competition in an industry, not whether they will broaden their screwing of a customer base
It΄s a global deal. Maybe the EU anti-trust institution prohibits it or adds a couple of "ifs" to their permit.
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March 28th, 2008, 06:32
Originally Posted by woges View Post
That's only if GTA IV does as expected… no idea what that is but I'm pretty sure that game is going to be rather well received and T2's shares rose by something like 10% on the release of Bioshock. Likewise if the game bombs the share prices will go the other way. So outcome will effect share prices to some extent though not to the amount EA is offering - though the fact that the company maybe undervalued may well be the reason EA would put in such an offer in the first place.
BioShock did better than expected.

GTA IV is expected to sell millions and it will, so indeed it won't impact the stock price if it does. Then comes the controversy and possibly another bevy of lawsuits (after all, why not? It worked last time)

Seriously, Take-Two should sell and it knows it should, it's just trying to drive up the prize. The fact is that they've been posting structural losses since the quarter they published Oblivion in. That's saying something.

Originally Posted by gorath
Who says the anti-trust laws allow this takeover?
I've never been impressed by anti-trust laws in the US

Neelie Kroes will kill them in the EU, though.
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April 17th, 2008, 22:54
Update to the poll I mentioned above:

Out of 12822 users of this poll,

78 % found the takeover plan of EA "frightening",

7 % say that it's the own fault of Take2 (games selling not well enough),

14 % don't care and believe that EA will keep the independence of the new labels.

Link: http://www.gamestar.de/index.cfm?pid=842&pk=7482

“ Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.“ (E.F.Schumacher, Economist, Source)
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April 17th, 2008, 23:15
The share holder meeting is tonight so I guess the picture will be very clear shortly. The FTC haven't cleared a take-over yet either.
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April 17th, 2008, 23:29
Personally, it all seems a tad sordid to me. But what to expect from EA & Take 2? Blah.
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May 19th, 2008, 17:06
Just as a throw-in : http://investor.ea.com/phoenix.zhtml…021&highlight=

“ Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.“ (E.F.Schumacher, Economist, Source)
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May 19th, 2008, 17:38
EA extended the offer to some time in July so this is still on the cards.
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