Electronic Arts went public with the news today that they are willing to pay $26 per share of stock in Take-Two Interactive. The decision to make this offer public came after Take-Two rejected a buyout bid from EA earlier in the week. Take-Two’s stock closed Friday at $17.36 per share, making EA’s offer a 50% premium.
For EA the take-over would be the perfect answer to the ongoing merger between Activision and Vivendi, and would put one of the hottest intellectual properties in the video game industry, Grand Theft Auto, under their control.
Take-Two’s board of directors, in an effort to convince their shareholders to resist the take-over, released a press release today reiterating that EA’s offer undervalues the worth of the company. Given the premium that EA is willing to pay Take-Two’s plea my be falling on deaf ears.
EA has scheduled a conference call to discuss it’s bid to acquire Take-Two Interactive tomorrow morning at 8:00 am (ET).
The next few days should be very interesting to watch. Even more so if you bought shares of Take-Two Interactive (TTWO) last week.
-Justin
Scheduled to start Mon, Feb 25, 2008, 8:00 am Eastern
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Forbes.com looks at last year’s winners and losers in the video game industry.
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In Pictures: The 10 Top-Selling Videogames
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New York, NY – February 24, 2008 –The Board of Directors of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today confirmed that it has received an unsolicited proposal from Electronic Arts Inc. (NASDAQ:ERTS) to acquire Take-Two for $26.00 per share in cash. Take-Two’s Board of Directors has thoroughly reviewed EA’s unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is inadequate in multiple respects and not in the best interests of Take-Two’s stockholders.
After careful evaluation, the Board has determined that EA’s proposal substantially undervalues Take-Two’s robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty. We believe EA’s unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry. Furthermore, the offer values the Company at a significant discount to its public peers and does not compensate Take-Two for its intrinsic value and the substantial synergies that the proposed combination would create.
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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 (BUSINESS WIRE) — Electronic Arts Inc. (“EA”) (NASDAQ: ERTS) today announced that it has proposed to acquire Take-Two Interactive Software, Inc. (“Take-Two”) (NASDAQ: TTWO) 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.” Click to read the rest of the story
It’s official. Micorsoft has announced that they are stopping production of the HD DVD player for the Xbox 360.
As a result of recent decisions made by Toshiba, Hollywood studios, and retailers, Microsoft plans to withdraw from HD DVD. Xbox will no longer manufacture new HD DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD DVD Players in the market. As we stated earlier, we do not believe this decision will have any material impact on the Xbox 360 platform or our position in the marketplace. HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room, along with playback of the DVD movies they already own.
Now the only reason to get a HD-DVD player for your Xbox 360 is so that you can put it in the museum next to the Beta Max player.
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