EA makes attempt to purchase Take Two
by 
Just came across the wire. It has been known for a while that Take Two was in financial trouble and that led many to believe EA would be interested in acquiring them. In all likelihood this would signal the end of 2K Sports at least in the way we know their current operations to be. There is now a website eataketwo.com that contains an open letter from EA CEO John Riccitiello. EA will be hosting a conference call tomorrow at 5am PT / 8am ET to discuss in greater detail. More to follow…
Update: Take Two’s statement of rejection
Update: Pachter says EA purchase of Take Two is inevitable
Update: Investors betting on the deal happening
ELECTRONIC ARTS PROPOSES TO ACQUIRE TAKE-TWO INTERACTIVE SOFTWARE FOR $26 PER SHARE IN CASH, OR APPROXIMATELY $2.0 BILLION
Proposal Represents 64 Percent Premium to Take-Two’s February 15th Closing Price and 63 Percent Premium to Take-Two’s Closing Price Over the Previous 30 Days
REDWOOD CITY, Calif., Feb. 24, 2008 – Electronic Arts Inc. today announced that it has proposed to acquire Take-Two Interactive Software, Inc. in an all-cash merger valued at approximately $2.0 billion.
EA’s proposal of $26 per share in cash represents a premium of 64 percent over Take-Two’s closing stock price on Feb. 15th, the last trading day before EA sent its revised proposal to Take-Two, and a 63 percent premium over Take-Two’s 30-day trailing average price over the thirty trading days ending on that date.
EA’s proposal was contained in a letter sent on Feb. 19th by EA Chief Executive Officer John Riccitiello to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two. The Take-Two Board’s subsequent rejection of the EA proposal led to EA’s decision to release the letter and bring its proposal to the attention of all Take-Two shareholders.
Mr. Riccitiello said today: “Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.”The EA letter warned that further Take-Two delay in accepting EA’s proposal could prevent Take-Two’s shareholders and other constituents from realizing its benefits. “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today,” Mr. Riccitiello wrote. The letter added that timely completion of the proposed transaction would allow EA’s strong publishing and distribution network to positively impact the ongoing post-launch sales of GTA IV and support the new Take-Two titles scheduled for launch later in the year and during the holiday selling season.
As noted in EA’s Feb. 19th letter, EA’s proposal is not conditioned on any financing requirement. It is, however, subject to certain customary conditions as set forth in the letter. EA’s $26 per share proposal is based on the current equity capitalization of Take-Two. Although EA indicated in the letter that its proposal was subject to negotiations commencing by Feb. 22nd, EA intends to keep its proposal open for the present to give Take-Two’s shareholders and Board of Directors further time to consider it.
February 24, 2008 at 6:26 pm
^yeah ea wants gta and bioshock; acquiring 2k sports will only get rid of the competition nothing more.
February 24, 2008 at 7:13 pm
so basically for us people that arnet that business smart what might this do?
What would MLB 2K9 be?
I’d love to see MVP Baseball 09 with Prince Fielder on the cover lol.
February 24, 2008 at 7:25 pm
[quote comment="14219"]so basically for us people that arnet that business smart what might this do?
What would MLB 2K9 be?
I’d love to see MVP Baseball 09 with Prince Fielder on the cover lol.[/quote]
How about MVP 2K9….. I think it works….
February 24, 2008 at 7:51 pm
i mean this only spell disaster…..remember when the madden exclusivity contract was signed and we lost chris berman at halftime as well as player of the game interviews and first person football….which were all promised to be imported into madden to ultimately make the game better.buuuuut once again we are duked due to the new “merger” it’s the “dreamcast complex”
sega dreamcast was wayyyy before its time which caused it’s demise
February 24, 2008 at 8:45 pm
meh, doesn’t really matter much to pasta because he rarely covers 2k games. only 2k games I’ve seen him cover as much as he does most of the ea games are the bigs and right now mlb 2k8
February 24, 2008 at 8:49 pm
[quote comment="14209"]
EA actually put effort in NBA Live 08? Not much that can tell! I will never buy an nba live game unless they vastly improve it! EA SUCKS![/quote]
I don’t disagree – NBA Live 08 was still terrible compared with NBA 2K8. But to see EA developers on the OS message boards asking for opinions on how to improve the game and such (much like what the MM team were doing as well), well that was a surprise to me.
The fruits of their efforts would probably begin to surface in the 09 titles, but if 2K isn’t around… well, I’m doubtful we’ll see that same level of concern.
February 24, 2008 at 11:13 pm
what would seriously happen to 2k9 though seriously would we only get nba live 09?
February 24, 2008 at 11:21 pm
An unparalleled disaster of the sports gaming world.
What’s the point of consoles improving if the choices of the consumer become more limited? Another company needs to step up and challenge the EA behemoth.
February 25, 2008 at 12:26 am
Pasta any idea as to y i cant reply on your site with my PS3? To stay on topic I hope EA gets that deal done. It would only make sense 4 them 2 combine whats best in both games (Live and 2K) and make 1 great game. right?
February 25, 2008 at 2:40 am
if you read TAKETWO’s comments carefully…you would have noticed that they ARE willing to deal their company to EA…but the holding put is the timing NOT the actual deal itself…TAKETWO is insistent on not opening talks until the day after the release of GTA IV (which will likely be a huge boost to their bottom line that they won’t have to share with EA, it also has the added bonus of potentially raising the stock price for the company)…EA is insistent on buying the company now which would allow them to rake in the proceeds of GTA IV, but would also allow them to make use of the takeover in this year’s sports games as well (in my mind)…waiting until the end of April for the takeover would seem to me that EA would not be able to fully make good use of the TAKETWO subsidary until at least next year…what are your thoughts PASTA?
February 25, 2008 at 2:45 am
[quote comment="14240"]if you read TAKETWO’s comments carefully…you would have noticed that they ARE willing to deal their company to EA…but the holding put is the timing NOT the actual deal itself…TAKETWO is insistent on not opening talks until the day after the release of GTA IV (which will likely be a huge boost to their bottom line that they won’t have to share with EA, it also has the added bonus of potentially raising the stock price for the company)…EA is insistent on buying the company now which would allow them to rake in the proceeds of GTA IV, but would also allow them to make use of the takeover in this year’s sports games as well (in my mind)…waiting until the end of April for the takeover would seem to me that EA would not be able to fully make good use of the TAKETWO subsidary until at least next year…what are your thoughts PASTA?[/quote]
Seems to me like they’re just trying to squeeze out more money. The GTA release is already built into the current stock price. That is well known and anticipated. The only thing that could really move the stock price would be it falling if GTA somehow bombed. Investors expect GTA to be a hit and that is already accounted for. so the idea that EA would jump in and buy TT while TT’s stock would rise because of GTA doesn’t really fly here. Just posturing from the TT side.
February 25, 2008 at 7:30 am
For those that think EA is going to scrap games that sell you are sick. When a company takes over another company, they do it to make money.
I feel EA knows that 2K Sports games were well recognized. Adding the developers from 2K will help innovate EA’s sports stable.
Take Two is already in financial trouble having scrapped a few of its sports titles (i.e. College Hoops). EA would have a great opportunity to take March Madness (which, IMO, is on the rise) and add 2K’s presentation.
Also, the return of MVP would be flipping awesome. I like MLB 2K but it hasn’t quite reached the level of MVP.
I think people fear the worst and hope for the best. If EA acquires Take Two I would rather hold my judgment until I see the product that comes from the merger.
February 25, 2008 at 8:18 am
obviously investors are excited, they’re betting on it happening
http://www.next-gen.biz/index.php?option=com_content&task=view&id=9295&Itemid=2
February 25, 2008 at 10:31 am
If this deal goes through, what will save us from bland, boring, zombie football? Maybe Backbreaker will be a good game.
February 26, 2008 at 3:04 pm
[quote comment="14195"]looks like t2 is intent on saying no:
http://ir.take2games.com/ReleaseDetail.cfm?ReleaseID=295739/quote
Sad to say, 2K’s response sounded more like a woman refusing to sleep with a guy because she’s not easy, and then asks him to come back next week with more chocolate and a dozen roses.
February 26, 2008 at 3:22 pm
[quote comment="14236"]Pasta any idea as to y i cant reply on your site with my PS3? To stay on topic I hope EA gets that deal done. It would only make sense 4 them 2 combine whats best in both games (Live and 2K) and make 1 great game. right?[/quote]
This is the most childish view of tis situation. In a perfect world, EA and 2K would hold hands and sing “We Are the World” and “combine what’s best in both games.” But this isn’t about making better games, it’s about getting rid of the thorn on EA’s side which is 2K. If this is about making better games, $2 billion could go a lot farther if EA Sports just applied it towards game design and research.
February 28, 2008 at 12:15 am
I know but I like being optimistic about certain situations that seem very dull