Take-Two Rejects EA's $2 Billion Bid
EA's offer to buy "Grand Theft Auto IV" publisher turned down
Electronic Arts, the videogame publisher juggernaut, last week during the Game Developers Conference proposed a takeover of Take-Two Interactive. The proposal was reported to include an offer of $26 per share of Take-Two, making the deal with a total of around $2 billion.
According to reports, EA previously offered Take-Two $25 per share, making the latest offer of $1 more a sign of the EA’s continued interested in a merger. But Take-Two has rejected EA’s best offer.
In
press release sent out on Sunday, Take-Two Interactive confirmed that it has turned down EA’s offer to acquire the company for $26.
“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,” read the Take-Two Interactive statement. “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.”
While stock of Take-Two Interactive currently sits at around $17, the company wasn’t entertained by EA’s offer of $26. “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,” added Take-Two.
EA CEO John Riccitiello said of the offer, “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today.”
Were a merger between EA and Take-Two to take place, sports games fans may suddenly find their options halved. The only major competitor against the EA Sports franchises is Take-Two’s 2K Sports.
Earlier this month, Riccitiello pledged that EA developers and properties would be
better taken care of and less stifled than previous acquisitions such as Westwood and Origin.
Take-Two’s most valuable asset is its close relationship with Rockstar Games, which contractually ends this year. It is expected, however, for Rockstar Games to renegotiate a new agreement with Take-Two Interactive.
