EA makes attempt to purchase Take Two
February 24, 2008 by pastapadre
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.
hey pasta whats take two
Oh boy, you can SMELL the flaming hatemail. Not only they will complain that Madden is a monopoly, wait till you see all sports being monopolized. If they accept, it will be an 11 on a 1-10 megaton rating.
metsfan55 wrote:
Take two is a company that has Rockstar games (GTA) and 2k sports under its belt. If they merge, EA gets GTA and the 2k/EA sports companies would become one.
o thats sucks so there is only going to be one amazing baseball game instead of one
** instead of 2 i meen**
This is the worst news ive read in a long time, I hope TakeTwo tells EA to shove it!!
so xbox 360 is going to have ths show caus i just bout a ps3 to get the show
metsfan55 wrote:
actually it would probably signal the return of MVP Baseball as the 3rd party title. They wouldn’t stop producing a baseball game whether it be under the name MVP or MLB 2K. The contract requires a release every year.
Xbox will never get the show. It’s made by SCEA
wishful thinking.. but maybe EA will keep the APF game around? think bout this.. EA could but out a current Madden NFL game as well as a NFL Legends game.. maybe
pasta, whatta think of that possibility?
im sure its just a wishful shot in the dark
please no..i would love to have MVP back but i would miss 2k basketball and 2k mlb
o sweet i love mvp baseball
nice name metsfan 96
Beau wrote:
Really depends on the contracts. With the NFL license they look to expand on the what they can do with it, which is why there are the Streets/Tour and Head Coach. Now here though if they’d have to go through and negotiate contracts individually, which wasn’t cheap for 2K to do, I’m not sure if they’d find that to be worthwhile.
Pasta, think a new Head Coach will come out this year?
tdoggy wrote:
http://www.pastapadre.com/2321.....-confirmed
hey pasta if they do make a new mvp baseball do u think it qould be like the number 1 title and how you think the graphics would be
metsfan55 wrote:
Its too early to say. They didn’t go through remaking the MVP engine for the new generation. So they’d have the option of starting from scratch or just taking on the 2K game and moving forward with that.
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
[…] has happened yet, but here are some links: EA’s Proposal To Acquire Take-Two Interactive Software EA makes attempt to purchase Take Two | pastapadre.com This deal would affect a lot of different games, but would be huge for sports […]
This mean the quality of EA sports flagship football title will get any better pasta?
Oh my god! So am I off when I say this could signal the end of one good NBA title (NBA 2K series) and the beginning of a disaster? Or will they pick apart what makes both titles a success and give an ultra realistic and graphics pleasing basketball title all in one?
Would this affect the release date of GTAIV?
solidkleenex wrote:
I dont think so. They’d just put their marketing push behind it.
John wrote:
I don’t think it would have much effect if any at all one way or the other for Madden
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!!!
I read on OS that Take Two has already declined the offer.
MarinerFan wrote:
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.
metsfan55 wrote:
I really don’t know how I’d be able to answer that right now.
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.
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.
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.
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.
MVP vs. The Show would be terrific. I’d definately buy both, each title warrants a buy.
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.
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.
NBA 2k Gameplay + NBA Live Graphics= best of both worlds
Return of MVP Baseball with Sig Style!!!!!!!!!!
looks like t2 is intent on saying no:
http://ir.take2games.com/Relea.....eID=295739
They turned it down…
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.
Turning it down means nothing. Now, EA will go the hostile takeover route - they were just playing nice in the first round.
Craig wrote:
Yeah that would be the next step, if the stockholders don’t put the pressure to accept the deal first.
EA better not “F” with the NBA 2K series! NBA 2K is the best basketball sim ever! NBA Live better disappear!
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 wrote:
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.
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.
pastapadre wrote:
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 wrote:
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!
so wait so there might not be a mlb 2k9 that would be dissapointing cause i but the show and 2k every year
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.
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 wrote:
According to an article on gamespot, 2K knows EA’s plan and is not going to sell until after the release of
GTA IV….
^yeah ea wants gta and bioshock; acquiring 2k sports will only get rid of the competition nothing more.
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.
Chad wrote:
How about MVP 2K9….. I think it works….
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
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
Mark wrote:
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.
what would seriously happen to 2k9 though seriously would we only get nba live 09?
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.
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?
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?
Jonathon wrote:
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.
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.
obviously investors are excited, they’re betting on it happening
http://www.next-gen.biz/index......8;Itemid=2
If this deal goes through, what will save us from bland, boring, zombie football? Maybe Backbreaker will be a good game.
just say no to ea wrote:
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.
Sean wrote:
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.
I know but I like being optimistic about certain situations that seem very dull