Finally, sense ? Take Two says 'No' to EA

knowledge123

knowledge123

knowledge123

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EA's fishing for Take-Two with dollars has taken a new turn this morning, with the latter company essentially saying EA's offer isn't good enough.

In a business jargon-littered monster press release on the matter - which we got about ten percent of the way through before almost nodding off - it's noted that Take-Two's board has deemed EA's cash offer of $26 per share inadequate "in multiple respects and contrary to the best interests of Take-Two's stockholders".

It goes on to add that Take-Two will review options after the release of Grand Theft Auto IV at the end of April, and that the company's board is "considering strategic alternatives in order to be prepared to engage in discussions with any parties, including EA, interested in a strategic business combination" post GTA IV's debut.

Rockstar's sequel is pivotal to the future of the company then, which is no surprise. It'll surely sell by the truckload, but whether that'll be enough to allow Take-Two to continue operating solo remains to be seen.
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Story linky


Official linky
 
Adrianr said:
I thought the board already said no to EA, hence EA going directly after the shareholders? Or is this just a more indepth 'no'?
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This is an official no from the shareholders, which as you say, EA went directly to, after Take Two said no to the first time.

I love this bit:

The timing of the EA Offer is opportunistic. The EA Offer is opportunistic and has been timed to take advantage of the upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the interactive entertainment software industry and the Company's biggest selling and most profitable franchise. EA launched an unsolicited bid for the Company even though the Company had extended an offer to negotiate with EA immediately following the release of Grand Theft Auto IV and, subject to the fiduciary duties of the Board of Directors, offered not to negotiate with any other third parties in the interim without first contacting EA. The Board of Directors believes the full commercial potential of the game will not be evident until after its release, and that the EA Offer was timed to capture the value of that anticipated commercial success at the expense of the Company's stockholders.
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Hehe. Do you think EA just sat there and thought..

"Hey lads.. maybe they haven't noticed GTA IV is going to be released soon.. reckon we can sneak in an early takeover and rob the profits?"
 
Adrianr said:
Hehe. Do you think EA just sat there and thought..

"Hey lads.. maybe they haven't noticed GTA IV is going to be released soon.. reckon we can sneak in an early takeover and rob the profits?"
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You have to wonder, don't you? I mean, with the biggest game of the century a month from release, I'd be holding on to my shares for dear life if I had any.
 
Sleepery said:
You have to wonder, don't you? I mean, with the biggest game of the century a month from release, I'd be holding on to my shares for dear life if I had any.
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Take Two's shares will rise massively post-GTA IV release, I can't see any other way, they would've been very silly to get rid of the at their current price so close to release. :)
 
knowledge123 said:
Take Two's shares will rise massively post-GTA IV release, I can't see any other way, they would've been very silly to get rid of the at their current price so close to release. :)
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Not necessarily. Good sales for GTAIV have already been priced into the stock so only if sales beat what are no doubt already high expectations will the price rise further.

Also interesting to see that the shares have hardly budged on the news, suggesting the market already thinks EA will succeed or someone else will come along and bid.
 
But it's not over yet, Take-Two has also announced that the company will "begin the review of strategic alternatives after the release of Grand Theft Auto IV" (i.e. at the end of April) and is "considering strategic alternatives in order to be prepared to engage in discussions with any parties, including EA, interested in a strategic business combination."
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http://clanbase.ggl.com/news.php?nid=282855
 
Aren't they breaking competition rules? I mean they own so many sunsidiaries from Maxis to Westwood studios, they seem to buy these developers out, then close them down or absorb them.
 
Yep EA often buy the name, keep some of the talent (ditch the majority), close down the studio and release game X under their own branding with much fanfare but poor coding & gameplay and limited or often no support.
 
sneakypenguin said:
Aren't they breaking competition rules? I mean they own so many sunsidiaries from Maxis to Westwood studios, they seem to buy these developers out, then close them down or absorb them.
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That's a good point. The competition rules normally kick in if a merger would take the combined company to over 25% of the “market”. What high powered lawyers then spend months arguing about is what the “market” is. While EA combined with Take 2 would probably have more than 25% of the video games market or xbox/ps3 market or something, their lawyers will argue that they have to look across all platforms inc handheld etc to show the real market and hence illustrate they're not really at 25% after all!
 
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