On the 24th February 2008, Electronic Arts announced that it had proposed to buy Take-Two Interactive Software (Grand Theft Auto: IV and Bioshock) for approximately $2.0 billion. The proposal was sent as a letter on 19th February by EA Chief John Riccitiello to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two.
Riccitiello said: “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.”EA warned Take-Two that if no response to their letter was accepted, then according to EA, Take-Two’s shareholders and other constituents from realizing its benefits. The full letter can be read here.
Take-Two today (25th February) responded to EA’s proposal with the following comment from Strauss Zelnick, Executive Chairman of the Board of Take-Two: “Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company. Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry. We’re extremely proud of our unique portfolio of game franchises, exceptional creative talent and loyal consumer following. Our Board believes that we will build greater value for our stakeholders by remaining relentlessly focused on our strategy and delivering on our mission of making the highest quality interactive entertainment.”
Zelnick continued: “While the Board believes that entering into discussions with EA at this time is not in the best interests of shareholders, we had offered to enter into a good-faith dialogue with EA to determine if our companies can reach common ground on the appropriate value of Take-Two as a first step to realizing a mutually beneficially transaction. However, given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released. Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release). We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA’s refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders.”
Would you like to have seen EA take over Take-Two? Leave a comment with your thoughts.