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Default EA - Proposes Take Two Acquisition Bid

February 25th, 2008, 01:04
In the latest episode of corporate game company takeovers, Electronic Arts has offered approximately 2 Billion USD, or $26. per share for Take Two Interactive Software in a proposal last week to add the software company to its ranks.
ShackNews gives a summary:
Publishing giant Electronic Arts last Tuesday proposed an acquisition of fellow publisher Take-Two at a price of $26 per share, or approximately $2 billion total.

Electronic Arts claims the proposal is more than fair, quoting the $26 share price as a 64 percent increase over Take-Two's recent stock value…

The Take-Two umbrella includes the publishing labels 2K Sports, 2K Games, and Rockstar Games. Together the labels encompass such hit properties as Rockstar Games' Grand Theft Auto, BioShock 2K Boston's Bioshock, and Firaxis' Sid Meier's Civilization.
Thanks to zyklop for the heads up in the forums.
More information.

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February 25th, 2008, 01:04
http://www.eatake2.com/

I lolled.
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February 25th, 2008, 01:25
I guess because of how the government is treating Microsoft they think that there is no problem in becoming a monopoly. They will keep buying the companies up and then either buy vivendi/activision or try to ruin them then buy them.

If monopolies were actually punished then this probably wouldn't happen but at least we still will have games from europe even if we have to import them.
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February 25th, 2008, 01:44
There are still enough competitors and new ones will arise, bigger than EA or ActivisionBlizzard. I'm quite sure.

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February 25th, 2008, 02:01
What?

You think new competitors will arrive in North America? Man, EA and ActiBliz are a handful of takeovers away from dominating the market, there's no question of newcomers there.

Maybe from Europe, but even then…doubtful. Markets don't work that way.
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February 25th, 2008, 02:30
This is just insane.

Someone there at EA "suffers" from a *huge* delusion of grandeur !

“ 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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February 25th, 2008, 10:35
Originally Posted by Brother None View Post
What?
You think new competitors will arrive in North America? Man, EA and ActiBliz are a handful of takeovers away from dominating the market, there's no question of newcomers there.
For example Warner already entered the market. They are to big to get swallowed by EA. With games becoming more and more interesting to the mainstream there is a lot of money that can be earned. Compared to several other entertaining companies even ActiBliz und EA are lightweights. In Germany television broadcasts just entered the market, Pro7Sat1 holds shares from ZeniMax, RTL is going to publish more games. You're right when you say that EA and ActiBliz will dominate the market for the next years, but that's not forever. I believe they have to grow if they don't want to get swallowed themselves (at least EA)

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February 25th, 2008, 13:54
Warner WAS already in the market. They published Z, for example. Under the "Renegate" label.

“ 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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February 25th, 2008, 17:44
Barriers to entry are fairly low for the gaming industry. That's not to say that they don't exist, but they are low compared to a lot of other industries, especially as open-source solutions for many things have arisen. As such, if EA continues to put out crap, simple demand will continue to create an environment where smaller publishers can develop and flourish. True, EA may buy them out as well, but if they keep putting out crap and then spending large sums to essentially put others out of the business, they will eventually fail.

That's not to say that I am happy with the current state of gaming, but I'm not overly concerned either.

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February 25th, 2008, 18:30
Originally Posted by Avantenor View Post
For example Warner already entered the market. They are to big to get swallowed by EA. With games becoming more and more interesting to the mainstream there is a lot of money that can be earned. Compared to several other entertaining companies even ActiBliz und EA are lightweights. In Germany television broadcasts just entered the market, Pro7Sat1 holds shares from ZeniMax, RTL is going to publish more games. You're right when you say that EA and ActiBliz will dominate the market for the next years, but that's not forever. I believe they have to grow if they don't want to get swallowed themselves (at least EA)
I think what he meant is that retail space, especially in the US, is limited and therefor much easier to get for the most "attractive" products. Which are the ones sold by the biggest publishers because they have proven that their products circulate fast.
The shelf space occupied by EA Sports, The Sims and WoW is locked. Nobody else will get it unless the financial arguments are crystal clear.

Entering the market may be manageable, but selling significant numbers is hard.

The big media companies tried to enter the games business before. They all failed because their timing in the console cycle was wrong. This time they are better prepaired though.
Please note that for a giant like Time Warner only mainstream success is attractive. A niche product here and there may be okay, but generally speaking they are working on million-sellers.

Pro7 invested in ZeniMax?
Last edited by Gorath; February 25th, 2008 at 18:39.
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February 25th, 2008, 19:10
Head to the previously linked ShackNews article for an update.

Take2 told EA to take a hike in a surprisingly blunt way (for an official corporate press release).
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February 25th, 2008, 19:20
I feel Shacknews is representing things in a confused, wrong order.

Take 2 told EA to take a hike a week ago, which is why EA published this news, to go past the board of directors and straight to the investors. We'll see if they sell once the prize is driven up, but all Take 2 did is made their pre-existing reply public.

Let us not get confused about the chronology here.
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February 25th, 2008, 19:29
Originally Posted by Gorath View Post
Pro7 invested in ZeniMax?
Yes, in october 2007. Dhruin posted an english news about this, too, but since the Americans don't know Pro7Sat1 it was only "an investor". In german news you could read that it was Pro7Sat1.

http://www.golem.de/0710/55713.html

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February 25th, 2008, 19:32
gamesindustry.biz has a timeline up for the deal if that helps anyone. There's also links to all their coverage on it at the bottom of the article.

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February 25th, 2008, 20:26
I always laugh when a company comes along and offers to buy the company at a huge premium and they claim that it's "too low". They executives just say this because they know that they'll lose their jobs.
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February 25th, 2008, 23:07
Originally Posted by doctor_kaz View Post
I always laugh when a company comes along and offers to buy the company at a huge premium and they claim that it's "too low". They executives just say this because they know that they'll lose their jobs.
If the executives at the takeover company are doing their job the offer should be too low, if they offer more they're wasteing their own shareholder's value. Most of the studies I've seen have been fairly scathing about mergers in general, aquiring companies will generally underestimate costs and overestimate benefits. Its also not necessary for the executives to loose their jobs - certainly in EA's case they've a history of running the compaines into the dirt before they get rid of the people who built them a decade or so later.
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February 26th, 2008, 21:16
Originally Posted by doctor_kaz View Post
I always laugh when a company comes along and offers to buy the company at a huge premium and they claim that it's "too low". They executives just say this because they know that they'll lose their jobs.
That doesn't really have much to do with it.

It's something you say automatically when someone makes a bid. I mean, it's not like you should jump on it. You're supposed to haggle. You're supposed to go "Ten for that you must be mad"

Here is a good article on why this thing is over before it started.
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February 26th, 2008, 21:25
Yeah it will pay off if they get a higher price out of it, but if the deal falls through, then the stockholders get screwed.
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February 26th, 2008, 21:31
Yip. Believe me, Take Two is sweating in its socks right now, EA is holding all the cards. Take Two hasn't posted a profit in aeons and if this deals falls through, the stockholders will be at the door with torches.

Regardless, if push comes to shove and EA has to go hostile, expect the stockholders to fold like a house of cards.

Pity. But it's a business
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February 26th, 2008, 21:47
Of course the deal will go through. Last year Riccitiello stopped the negotiation process because he thought EA should restructure first. Now Zelnick thinks T2 needs more time. In a few months they will find out they΄re all friends.
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