Back in February, games giant Electronic Arts launched a $2 billion takeover bid of Take-Two Interactive, the publisher of the Grand Theft Auto series. After being thwarted in the initial bid, Electronic Arts then offered to buy all outstanding Take-Two Interactive stock for around $26 dollars per share. The price for TTI shares closed at only a dollar less than EA's valuation on the day before the original offer was made.
This offer too was subsequently vetoed by the board as being inadequate, especially considering at the time, the imminent release of the hugely anticipated Grand Theft Auto IV. GTA IV went on to amass over $500 million dollars in its first week of release, subsequently greatly improving the value of TTI, whose shares currently trade around dollar above EA's valuation.
EA, however, not to be put off by the latest rebuttal have extended the offer deadline, which now expires on June 16th. However, it is believed that EA have not increased their offer further and have claimed that while they are interested in taking over TTI, they are not 'desperate'.
The US Federal Trade Commission has requested to study details of the proposal, which may allude to the reason why EA have extended the offer deadline, but its likely that unless EA considerably up their offer, then TTI will not bend and will continue to thwart EA's efforts, however TTI have not yet irrefutably ruled out any sale and are actively holding formal talks with regards to sell it's assets. However, it's patently clear that the firm are holding out for a fair price.
Given the value injected into Take Two after the release of Grand Theft Auto IV, they are in a strong position. Electronic Arts, in contrast, have been struggling for some time now and only recently reported a fourth quarter loss of $94 million, as well as issuing warnings that revenue estimates for the first half of 2009 will likely not be met.
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Brian Healy
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PC Gaming Blog
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May 21 2008, 05:17 AM