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EA Looks to Take Take-Two

Electronic Arts has announced they are looking to buy Take-Two Interactive for a whopping 2 billion dollars. The article offers the text of a letter sent to Take-Two from EA Chief Executive Officer John Riccitiello describing the all-cash offer that has been rejected by Take-Two. EA is now making this public in the hopes that Take-Two shareholders will find it appealing and exert pressure on the board to accept it. Here's a summary:

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (“EA”) (NASDAQ: ERTS - News) today announced that it has proposed to acquire Take-Two Interactive Software, Inc. (“Take-Two”) (NASDAQ: TTWO - News) 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.

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44 Replies. 3 pages. Viewing page 1.
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44. Re: No subject Feb 25, 2008, 13:57  dsmart 
 
This has been in the works for some time now. AFAIK, the deal will move forward because, quite frankly, TT board would be stupid to refuse this given the ups and downs of TT over the years.

EA will buy TT. There will be layoffs, studio closures and the like. Then a few months later, two or three new studios founded by TT studio refugees will start sprouting up. They will then end up distributing their games with EA or go bust.

Since both companies are publicly held and our industry has no oversight, there is no recourse for any company (e.g. Activision, MS, UBI etc) thinking that the TT buyout would cause a problem and thus have the FTC trigger an investigation before the deal can move forward.

The industry consolidation plows onwards. I'm surprised that EA went for TT first before UBI. I suspect that the sports game had something to do with it.

The TT studio bigwigs will never stay with EA. The corporate culture is vastly different. The end result is that, once again, the IP is going to change hands but most of the talent behind those IPs are going to be scattered to the wind.

 
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Game developers are just human beings who happen to make games for a living. If you want to hold us up to higher standards of conduct, then go ahead
...but don't be surprised if we don't uphold them
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43. No subject Feb 25, 2008, 06:35 goatman
 
If this goes hostile what keeps the personnel from jumping ship and forming another dev house? Granted they would loose any capital they had unless they sell their shares, but why not do that. Sell what you own, announce it, and leave. That would really tank the stock right before a buyout.

 
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42. Re: No subject Feb 25, 2008, 05:54 Chairman Kaga
 
The days maybe coming when EA buys up the last Developer and feeds us nothing but bad ports of the Sims, MMO's and sports games for PC.

So, business as usual, then. Got it.

 
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41. Re: No subject Feb 25, 2008, 03:52 Cutter
 
The healthcare and military companies beat them to it.

Ba doom bing! Parralax FTW!


"You know, the best part of the best drug in the world isn't the high. It's the moment just before you take it. The dice are dancing on the table. Between now and the time they stop, that's the greatest high in the world."
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"The South will boogie again!" - Disco Stu
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40. Re: No subject Feb 25, 2008, 03:05 Parallax Abstraction
 
EA should buy the white house next.

The healthcare and military companies beat them to it.

Parallax Abstraction
Ottawa, Canada
 
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39. Re: No subject Feb 24, 2008, 23:31 manic half
 
noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

 
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38. No subject Feb 24, 2008, 22:59 Veinman
 
I definitely don't want EA to touch GTA.

 
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37. Re: No subject Feb 24, 2008, 22:48 Bone43
 



The days maybe coming when EA buys up the last Developer and feeds us nothing but bad ports of the Sims, MMO's and sports games for PC.

 
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36. Re: Rejected Feb 24, 2008, 22:31 Yosemite Sam
 
Bid has been rejected already

2K's Board rejected the bid, EA has gone over thier heads and put the offer out so the shareholders can see it. If the majority of shareholders vote to sell, then its sold. 2K's board can do nothing, they answer to the shareholders.




"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." Benjamin Franklin
 
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35. Re: No subject Feb 24, 2008, 22:28 >U
 
If they do acquire 2K and actually do give Irrational System Shock 3 and make it a PC-exclusive RPG/shooter worthy of the title, I'll be genuinely surprised.
It definitely won't be PC-exclusive.

Bioshock was pretty dumbed down.
My point wasn't that Bioshock wasn't dumbed down at all, but rather that PC gamers as a whole didn't seem to care about it enough to prevent them from buying and playing the game.

This comment was edited on Feb 24, 22:30.
 
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34. Re: No subject Feb 24, 2008, 22:16 Jerykk
 
Whether or not a switch in developers would actually make the game better (Personally I think Starbreeze's games have been no worse than Irrational's as a whole), it might give the game a perception boost in the minds of reviewers and game consumers.

The problem is that EA doesn't actually back up their claims. They decried the lack of innovation in the industry yet they continue to pump out sequels every year. If they do acquire 2K and actually do give Irrational System Shock 3 and make it a PC-exclusive RPG/shooter worthy of the title, I'll be genuinely surprised.

It will most likely be no more dumbed down than Bioshock or Riddick were.

Bioshock was pretty dumbed down. They stripped out all the RPG aspects, removed inventory management and weapon deterioration, made the respawn chambers free to use as many times as you want, the plasmids were exchangeable at any time, weapons only had two upgrades each, etc.

As for Riddick, well, you can't really say it was dumbed down because it didn't really have any predecessor. It was a stealth shooter and pulled that off well.

I like Starbreeze but I don't know if they could pull off an RPG/shooter. Developing for the 360 as the focus won't help any.

 
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33. No subject Feb 24, 2008, 21:27 Xero
 
Oh god, the Microsoft of gaming...RUN FOR YOUR LIFE! AhhhhhHHHH!

 
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Currently playing: Skyrim
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32. Re: No subject Feb 24, 2008, 21:19 >U
 
I highly, highly doubt that EA would switch developers mid-project. That would just cost them time and money and I don't think they really care whether or not the original developers are involved.
It depends. EA has become very concerned about its falling review scores lately. Whether or not a switch in developers would actually make the game better (Personally I think Starbreeze's games have been no worse than Irrational's as a whole), it might give the game a perception boost in the minds of reviewers and game consumers. That would most likely boost review scores and sales in turn. So, in that instance a switch in developers would be economically feasible.

you know that it'll be a dumbed down multi-platform release (with the 360 as the lead platform) that will be nothing like SS1 or 2.
It will most likely be no more dumbed down than Bioshock or Riddick were.

This comment was edited on Feb 24, 21:25.
 
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31. No subject Feb 24, 2008, 21:02 Wilson
 
Company gets larger while their games get shittier.

I was on the can earlier today, and I found myself thinking about EA. I drew a startling parallel between EA and the human digestive system, wherein both take in an interesting variety of things, crush them up, and produce in the end an ugly mass of samey trash.

 
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30. Rejected Feb 24, 2008, 20:28 BlessedBullet
 
Bid has been rejected already

http://www.reuters.com/article/mergersNews/idUSWEN407620080224

Looks like they want to want until after GTA4 - would put them in a better position to ask for a lot more money.


This comment was edited on Feb 24, 20:28.
 
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29. Re: Just noticed something... Feb 24, 2008, 20:19 Kxmode
 
Notice how EA buys companys just before their 'BIG HIT' is released like with Bioware and Mass Effect?

Because EA doesn't innovate they assimilate. EA has always been a publisher. They're so large that they gone beyond the realm of publishing titles, into the stratosphere of buying entire companies just to own a franchise or two. I wish the Government would step in and stop this BS. This is going to harm the video game industry more than anything...

-----
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Game p/reviewer for http://www.gameindustry.com/
 
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28. Godzilla Feb 24, 2008, 20:14 Kxmode
 
Company gets larger while their games get shittier. One day the video game industry will implode on itself.

-----
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27. Re: No subject Feb 24, 2008, 19:36 Yosemite Sam
 
No, this buyout will happen. Take 2 stock has taken a beating over the years because of all of the financial shenanigans by its crooked executives. Take 2 stockholders will jump at the chance to sell their shares to EA (or anyone else willing to pay 26 bucks for them). The stockholders and the rest of Wallstreet will also see this as EA bringing stability and legitimacy to Take 2. So, one way or another, this buyout is a done deal.

Thats the way I see it. Stockholders dont think 'no way, they are going to ruin civ' they are being offered 63% premium, almost double your money overnight... hmm lets see do I stick it out and hope 2K can turn it around or do I take 63% guarranteed now, and probably cash in on some EA stock when it goes through the roof when GTA4 hits the street. 2K execs are going to say whatever they can come up with, they are fighting for teir jobs. EA gets them and they're unemployed, along with all the high paid talent. I do not think we can count on antitrust laws stopping this either. 2K and the Goverment(US), I would think are not seeing eye to eye these days ie hotcoffee. Perfect predator move if you ask me, didnt EA and Microsoft exchange a couple of execs awile back?

EDIT heh maybe Jack isnt crazy after all, he just has an extremely generous client.




"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." Benjamin Franklin
This comment was edited on Feb 24, 19:58.
 
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CIV4 MOD http://forums.civfanatics.com/showthread.php?t=326525
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26. Re: No subject Feb 24, 2008, 19:33 Jerykk
 
Of course if this deal goes through, EA may switch that game to Irrational and give Starbreeze something else to work on.

I highly, highly doubt that EA would switch developers mid-project. That would just cost them time and money and I don't think they really care whether or not the original developers are involved. Besides, if Redline really is SS3, you know that it'll be a dumbed down multi-platform release (with the 360 as the lead platform) that will be nothing like SS1 or 2.

 
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25. Re: No subject Feb 24, 2008, 18:46 >U
 
This news item is now void.
No, this buyout will happen. Take 2 stock has taken a beating over the years because of all of the financial shenanigans by its crooked executives. Take 2 stockholders will jump at the chance to sell their shares to EA (or anyone else willing to pay 26 bucks for them). The stockholders and the rest of Wallstreet will also see this as EA bringing stability and legitimacy to Take 2. So, one way or another, this buyout is a done deal.

This comment was edited on Feb 24, 18:48.
 
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44 Replies. 3 pages. Viewing page 1.
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