SAN FRANCISCO (AP) - Electronic Arts Inc. said Sunday it was pushing ahead
with a bid to take over upstart gaming rival Take-Two Interactive Software Inc.,
despite rebuffs from the smaller company.
EA said in a statement that it was making an all-cash bid of $26 per share,
or about $2 billion, for New York-based Take-Two, known for its "Grand Theft
Auto" franchise.
EA, the world's largest independent video game publisher, said it was
releasing details of the proposal to get the attention of Take-Two shareholders
after Take-Two's board turned down its second bid in two weeks.
The offer represents a 64 percent premium over Take-Two's closing stock
price of $15.83 on Feb. 15, the last trading day before Redwood City-based EA
made its proposal. Take-Two shares closed at $17.36 Friday.
"There can be no certainty that in the future EA or any other buyer would
pay the same high premium we are offering today," EA Chief Executive John
Riccitiello wrote in a letter to Take-Two released Sunday.
Riccitiello added that Take-Two's quick acceptance of the offer would mean
EA could put its marketing muscle behind the eagerly awaited release of "Grand
Theft Auto IV," set for April 29.
In its response, Take-Two called the EA offer a "highly opportunistic"
attempt to take advantage of the game's upcoming release.
"Electronic Arts' proposal provides insufficient value to our shareholders
and comes at absolutely the wrong time," Take-Two chairman Strauss Zelnick said
in a statement Sunday.
Zelnick said EA rejected Take-Two's offer to resume discussions of the
takeover bid the day after "Grand Theft Auto IV" hit store shelves.
EA said it offered $26 per share Tuesday after Take-Two rejected a
$25-per-share bid earlier this month.
The offer comes as Take-Two works to regroup following a rocky year.
Shareholders threw out most of the company's top leadership last spring over
poor results as well as accounting troubles and controversy surrounding violent
and sexual content in the company's games.
Several former Take-Two executives, including Chairman and CEO Ryan A.
Brant, pleaded guilty in 2007 to falsifying business records in connection with
a probe into backdated stock options.
Also last year, the British Board of Film Classification refused to certify
"Manhunt 2," a gory game which received an Adults-Only rating from the
Entertainment Software Rating Board in the U.S.
EA, which publishes the "Madden NFL" and "FIFA Soccer" series among its
popular sports franchises, has been working recently to beef up its product
lineup with a wider variety of titles.
In January, the company closed its acquisitions of BioWare Corp. and
Pandemic Studios, known for their action, adventure and role-playing games, in
an $860 million deal, the largest in EA's history.
Earlier this month, the company announced that "Spore," the highly
anticipated game from "Sims" creator Will Wright, will go on sale on the weekend
of Sept. 7 amid likely stiffer competition in the $18 billion video game market.
In a deal expected to close in the first half of this year, French media and
telecom giant Vivendi SA plans to combine EA's chief rival, Activision Inc.,
with its own games unit to form Activision Blizzard. The merged company will own
the wildly popular online game "World of Warcraft" and the "Guitar Hero"
franchise.
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