EA makes attempt to purchase Take Two

by pastapadre
Posted February 24th, 2008 at 12:47 pm

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.

Tags:

MarinerFan

I read on OS that Take Two has already declined the offer.
http://www.pastapadre.com/ pastapadre

[quote comment="14181"]I read on OS that Take Two has already declined the offer.[/quote]

Zelnick did, so EA upped the offer and made it public to create pressure. This is a deal that would be hard for the shareholders and board to turn down. I know they’ve stated that they have but I guess we’ll have a better picture tomorrow morning of where EA stands and how resistant Take Two is.
http://www.pastapadre.com pastapadre

[quote comment="14181"]I read on OS that Take Two has already declined the offer.[/quote]

Zelnick did, so EA upped the offer and made it public to create pressure. This is a deal that would be hard for the shareholders and board to turn down. I know they’ve stated that they have but I guess we’ll have a better picture tomorrow morning of where EA stands and how resistant Take Two is.
http://www.pastapadre.com/ pastapadre

[quote comment="14179"]no but for your opinion if they did make it would u think it would be the # one title and how u think the graphics mite be!!![/quote]

I really don’t know how I’d be able to answer that right now.
http://www.pastapadre.com pastapadre

[quote comment="14179"]no but for your opinion if they did make it would u think it would be the # one title and how u think the graphics mite be!!![/quote]

I really don’t know how I’d be able to answer that right now.
Shomari

I’m cool with this if EA takes what Take Two does best (presentation) and they keep doing what THEY do best (gameplay).

Unfortunately the monopoly sounds bad on its face.
Shomari

I’m cool with this if EA takes what Take Two does best (presentation) and they keep doing what THEY do best (gameplay).

Unfortunately the monopoly sounds bad on its face.
MarinerFan

As long as it doesn’t effect The Show and GTA too much then honestly I don’t really mind. I have never really liked the 2K titles. The game play is slightly better then EA IMO but the eye candy is just sooo much better on the EA titles. This is just MY OPINION!!! I know there will be many who disagree.
MarinerFan

As long as it doesn’t effect The Show and GTA too much then honestly I don’t really mind. I have never really liked the 2K titles. The game play is slightly better then EA IMO but the eye candy is just sooo much better on the EA titles. This is just MY OPINION!!! I know there will be many who disagree.
tdoggy

The Show wouldn’t possibly be affected. Only affect it could have is maybe bringing back MVP, which would only positively affect The Show by adding competition. I don’t see how GTA could be negatively affected by this either, it’s still really in Rockstar’s hands, just being published by Take Two.
tdoggy

The Show wouldn’t possibly be affected. Only affect it could have is maybe bringing back MVP, which would only positively affect The Show by adding competition. I don’t see how GTA could be negatively affected by this either, it’s still really in Rockstar’s hands, just being published by Take Two.
MarinerFan

I am really an EA fan. Yes sometimes they focus on stupid gimmicks instead of gameplay. (2K did this with the card in MLB this year) For the most part I really enjoy Madden and Live. Plus If they did bring back MVP that would be baseball heaven.
MarinerFan

I am really an EA fan. Yes sometimes they focus on stupid gimmicks instead of gameplay. (2K did this with the card in MLB this year) For the most part I really enjoy Madden and Live. Plus If they did bring back MVP that would be baseball heaven.
tdoggy

MVP vs. The Show would be terrific. I’d definately buy both, each title warrants a buy.
tdoggy

MVP vs. The Show would be terrific. I’d definately buy both, each title warrants a buy.
Groundhog

This doesn’t mean Madden, Live, or March Madness would get better; it just means that the 2K titles will dissapear, leaving no competition what-so-ever. Some of the programmers from the 2K sports titles might possibly get moved to the EA sports titles, but knowing how these things usually go down, that’s unlikely.

I guess there is one brightside; with no 2K sports titles being released each year (assuming this goes down, and with the way EA are playing this it seems like it will), I won’t be spending any cash on video games each year.
Groundhog

This doesn’t mean Madden, Live, or March Madness would get better; it just means that the 2K titles will dissapear, leaving no competition what-so-ever. Some of the programmers from the 2K sports titles might possibly get moved to the EA sports titles, but knowing how these things usually go down, that’s unlikely.

I guess there is one brightside; with no 2K sports titles being released each year (assuming this goes down, and with the way EA are playing this it seems like it will), I won’t be spending any cash on video games each year.
agent k

I was planning on buying either live 09 or 2k9 this year based on the competition but now it looks like I might not buy either or live if it is legitimately good this year.
agent k

I was planning on buying either live 09 or 2k9 this year based on the competition but now it looks like I might not buy either or live if it is legitimately good this year.
lathrowback

NBA 2k Gameplay + NBA Live Graphics= best of both worlds

Return of MVP Baseball with Sig Style!!!!!!!!!!
lathrowback

NBA 2k Gameplay + NBA Live Graphics= best of both worlds

Return of MVP Baseball with Sig Style!!!!!!!!!!
just say no to ea

looks like t2 is intent on saying no:
http://ir.take2games.com/ReleaseDetail.cfm?ReleaseID=295739
just say no to ea

looks like t2 is intent on saying no:
http://ir.take2games.com/ReleaseDetail.cfm?ReleaseID=295739
http://twins-territory.blogspot.com/ TwinsTerritory

They turned it down…
http://twins-territory.blogspot.com TwinsTerritory

They turned it down…
Craig

Man, when did they pass out the rose-colored glasses in this comment section?! They’re not going to combine games, people! EA is doing this for pure consolidation reasons. If you can’t defeat the competition, remove it!

As groundhog said, you’ll be seeing LESS choice, not more. And, EA already owns the football market (APF2K not withstanding) – how has that gone? Everyone happy with Madden every year?!

From a Microsoft and Sony standpoint, I can see some backroom maneuvering right now. While it’s nice and healthy to have 3rd party software made for your system, what if that 3rd party OWNS everything like EA is hoping to? They can then begin to dictate things such as, “Hey Sony, stop making MLB: The Show, or else we’ll make GTA V an exclusive for Microsoft.” Lovely. This sucks on all fronts.
Craig

Man, when did they pass out the rose-colored glasses in this comment section?! They’re not going to combine games, people! EA is doing this for pure consolidation reasons. If you can’t defeat the competition, remove it!

As groundhog said, you’ll be seeing LESS choice, not more. And, EA already owns the football market (APF2K not withstanding) – how has that gone? Everyone happy with Madden every year?!

From a Microsoft and Sony standpoint, I can see some backroom maneuvering right now. While it’s nice and healthy to have 3rd party software made for your system, what if that 3rd party OWNS everything like EA is hoping to? They can then begin to dictate things such as, “Hey Sony, stop making MLB: The Show, or else we’ll make GTA V an exclusive for Microsoft.” Lovely. This sucks on all fronts.
Craig

Turning it down means nothing. Now, EA will go the hostile takeover route – they were just playing nice in the first round.
Craig

Turning it down means nothing. Now, EA will go the hostile takeover route – they were just playing nice in the first round.
http://www.pastapadre.com/ pastapadre

[quote comment="14199"]Turning it down means nothing. Now, EA will go the hostile takeover route – they were just playing nice in the first round.[/quote]

Yeah that would be the next step, if the stockholders don’t put the pressure to accept the deal first.
http://www.pastapadre.com pastapadre

[quote comment="14199"]Turning it down means nothing. Now, EA will go the hostile takeover route – they were just playing nice in the first round.[/quote]

Yeah that would be the next step, if the stockholders don’t put the pressure to accept the deal first.
Mark

EA better not “F” with the NBA 2K series! NBA 2K is the best basketball sim ever! NBA Live better disappear!
Mark

EA better not “F” with the NBA 2K series! NBA 2K is the best basketball sim ever! NBA Live better disappear!
Mark

EA is only doing this because they are afraid of 2K sports…… EA sports is getting worse every year (except for nhl) 2K should tell them to piss off!
Mark

EA is only doing this because they are afraid of 2K sports…… EA sports is getting worse every year (except for nhl) 2K should tell them to piss off!
http://www.pastapadre.com/ pastapadre

[quote comment="14203"]EA is only doing this because they are afraid of 2K sports…… EA sports is getting worse every year (except for nhl) 2K should tell them to piss off![/quote]

Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.
http://www.pastapadre.com pastapadre

[quote comment="14203"]EA is only doing this because they are afraid of 2K sports…… EA sports is getting worse every year (except for nhl) 2K should tell them to piss off![/quote]

Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.
John

Well I think the whole thing revolves pretty much around certain assets of take 2. Obviously with 2k cutting titles and the growing speculation that the company will be unloaded at some point it points to a sale. EA for sure wants to add to the bottom line and of course GTA IV is going to be the number one title out there for the forseeable future. Good strategic move for EA but overall I think another bad move for us gamers.
http://n/a John

Well I think the whole thing revolves pretty much around certain assets of take 2. Obviously with 2k cutting titles and the growing speculation that the company will be unloaded at some point it points to a sale. EA for sure wants to add to the bottom line and of course GTA IV is going to be the number one title out there for the forseeable future. Good strategic move for EA but overall I think another bad move for us gamers.
Groundhog

[quote comment="14204"]
Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.[/quote]

While I don’t doubt that GTA is a biiiiiiig part of why EA wants to get this done, I don’t think you can underestimate how much EA would like to be rid of 2K Sports. That would instantly increase sales in their Live series, something you can be sure they are desperate to do given the extra amount of effort they seem to have put in to their Live title in 08, as well as removing any problems a potentially new and customizable 2K football game with franchise play might cause.

Flagging sales for the EA Sports games has been big news these past few years.
Groundhog

[quote comment="14204"]
Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.[/quote]

While I don’t doubt that GTA is a biiiiiiig part of why EA wants to get this done, I don’t think you can underestimate how much EA would like to be rid of 2K Sports. That would instantly increase sales in their Live series, something you can be sure they are desperate to do given the extra amount of effort they seem to have put in to their Live title in 08, as well as removing any problems a potentially new and customizable 2K football game with franchise play might cause.

Flagging sales for the EA Sports games has been big news these past few years.
Mark

[quote comment="14207"][quote comment="14204"]
Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.[/quote]

While I don’t doubt that GTA is a biiiiiiig part of why EA wants to get this done, I don’t think you can underestimate how much EA would like to be rid of 2K Sports. That would instantly increase sales in their Live series, something you can be sure they are desperate to do given the extra amount of effort they seem to have put in to their Live title in 08, as well as removing any problems a potentially new and customizable 2K football game with franchise play might cause.

Flagging sales for the EA Sports games has been big news these past few years.[/quote]

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!
Mark

[quote comment="14207"][quote comment="14204"]
Take Two would love to get rid of the 2K Sports division because it isn’t profitable. They even took themselves out of their college basketball franchise without EA having to do anything. If there was an offer just for 2K Sports its likely Take Two would’ve been happy to get rid of it. But this deal seems to be more about Rockstar with 2K being secondary.[/quote]

While I don’t doubt that GTA is a biiiiiiig part of why EA wants to get this done, I don’t think you can underestimate how much EA would like to be rid of 2K Sports. That would instantly increase sales in their Live series, something you can be sure they are desperate to do given the extra amount of effort they seem to have put in to their Live title in 08, as well as removing any problems a potentially new and customizable 2K football game with franchise play might cause.

Flagging sales for the EA Sports games has been big news these past few years.[/quote]

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!
http://www.pastapadre.com/ metsfan55

so wait so there might not be a mlb 2k9 that would be dissapointing cause i but the show and 2k every year
http://www.pastapadre.com metsfan55

so wait so there might not be a mlb 2k9 that would be dissapointing cause i but the show and 2k every year
Russell Giles

I’m more of a 2K fan than I am EA Sports. However, if this deal goes through, I won’t be disappointed. Granted, I always did enjoy the NBA2K series more so than NBA Live. But since EA extended the exclusive agreement with the NFL for another 3 years anyway, what’s the point of 2K being around? I think that was the only hope that 2K had.

If EA combines efforts and personnel (game developers) with Take Two, maybe then we would finally see sports gaming worthy of being called ‘next gen’. But, if EA acquires 2K Sports (Take Two) and still manages to produce the poor quality sports games we’ve been accustomed to the past couple years, then obviously this deal would not be a good thing.
Russell Giles

I’m more of a 2K fan than I am EA Sports. However, if this deal goes through, I won’t be disappointed. Granted, I always did enjoy the NBA2K series more so than NBA Live. But since EA extended the exclusive agreement with the NFL for another 3 years anyway, what’s the point of 2K being around? I think that was the only hope that 2K had.

If EA combines efforts and personnel (game developers) with Take Two, maybe then we would finally see sports gaming worthy of being called ‘next gen’. But, if EA acquires 2K Sports (Take Two) and still manages to produce the poor quality sports games we’ve been accustomed to the past couple years, then obviously this deal would not be a good thing.
tomba321

This thing is all about BioShock. GTA and possibly NBA 2k. It’s already known the producer of 2k8 went off to nba live’s helm.

i personally think GTA4 has the ability to easly sell 20 millon or more worldwide for both consoles. EA wants THAT. the sales alone of GTA4 would pay EA for the 2 billon that 2k would get from ea already.
tomba321

This thing is all about BioShock. GTA and possibly NBA 2k. It’s already known the producer of 2k8 went off to nba live’s helm.

i personally think GTA4 has the ability to easly sell 20 millon or more worldwide for both consoles. EA wants THAT. the sales alone of GTA4 would pay EA for the 2 billon that 2k would get from ea already.
Mark

[quote comment="14214"]This thing is all about BioShock. GTA and possibly NBA 2k. It’s already known the producer of 2k8 went off to nba live’s helm.

i personally think GTA4 has the ability to easly sell 20 millon or more worldwide for both consoles. EA wants THAT. the sales alone of GTA4 would pay EA for the 2 billon that 2k would get from ea already.[/quote]

According to an article on gamespot, 2K knows EA’s plan and is not going to sell until after the release of
GTA IV….