The Deal
Tuesday, November 24, 
12:27 pm

Who are those possible Take-Two bidders anyway?

  Share     E-Mail    Discussion    Print Story
GTA_4.jpgEarlier, Dealscape filed a summation of Take-Two Interactive Software Inc.'s SEC filing divulging the possibility of competing bids, but there was nary a name identifying who might try to challenge Electronic Arts Inc.'s $2 billion bid. Dealscape trolled through video game sites and blogs to handicap the possible bidders.

Continue reading below

Also on Dealscape

The nonstarters
First, let's dispense with who isn't likely to bid because it's far easier than guessing who may. Off the bat, it's easy to discount both Activision Blizzard, which is in the process of integrating its own megamerger, and Ubisoft Entertainment. Both have gone on the record saying they aren't interested. Activision Blizzard just closed a $17 billion merger, but Ubisoft is less obvious. Ubisoft representatives reportedly told Les Echos that the company's money would be better spent on licensing content than buying a rival, according to Cnet's Gamespot. It's a good cover considering EA also happens to own about 20% of the French gaming company.

Additionally, it's a safe assumption -- despite the rumors on message boards at game site Kotaku -- that Microsoft Corp., Nintendo Co. Ltd. or Sony Corp., each of which has the cash to challenge EA, would not dare to bid simply because EA is a console kingmaker. If any of the three companies were to make a bid, EA could simply "retaliate" by withholding support or -- so not to elicit antitrust attention -- its best titles from a console maker's system.

While Viacom Inc. seems like a possible bidder, CEO Phillipe Dauman went on the record Friday saying the company isn't interested in a bidding war, according to Tech Confidential. Viacom seemed like a natural, based on its fourth-quarter report, which cited the popularity of music-based video game "Rock Band" as a contributor to unexpectedly strong earnings.

The bidders
If Take-Two has had interest, it would likely have to come from major media players because they're the only ones -- aside from the aforementioned companies -- with the cash to take on EA's $2 billion bid. Plus, the credit crunch will likely keep private equity firms like Silver Lake, TPG, Providence Equity Partners LLC and others away.

So who's left? Well, Walt Disney Co. While Take-Two's controversial titles might be a little edgy for the Mouse House, it is the same company that airs the highly sex-driven "Desperate Housewives," and Take-Two does make tamer games -- "Table Tennis" and "Civilization" come to mind -- than the violent "Grand Theft Auto." Additionally, Disney has some exposure to the game world not only through licensing arrangements with THQ Inc., but also through the 2007 purchase of the Club Penguin virtual world for children. Additionally, Disney has reportedly been trying to develop more games internally, and Take-Two owns a large pool of development talent, who could be tasked with making high-quality games from internal franchises like a "Pirates of the Carribean" game that is actually good. However, Disney execs would have to think long and hard about the possible backlash it could receive from taking on the baggage that is "Grand Theft Auto."

Other media giants who could be interested include NBC Universal, News Corp. and Time Warner Inc., which all have far less exposure to video games than Viacom or Disney.

Of course, as MarketWatch's Herb Greenberg points out, perhaps all the talk is just spin. - Matthew Wurtzel

See proxy filing from the SEC Edgar
See Viacom story from Tech Confidential
See Viacom story from the New York Post
See Activision story from Cnet's Gamespot
See Ubisoft story from Cnet's Gamespot
See Herb Greenberg's blog at MarketWatch
See Dealscape: EA reached out to Take-Two a year ago
See story about EA's offer from TheDeal.com
See story from TheDeal.com about activists taking control of Take-Two
See Tech Confidential: Electronic Arts CFO hints it may get tough with Take-Two
See Dealscape: Meet the shared shareholders of EA, Take-Two
See Dealscape: Ubisoft as Take-Two's hero? Not so fast
See Tech Confidential: A second look at EA's Take-Two offer
See Corporate Dealmaker: EA's massive Take-Two offer could give Hollywood a BioShock
See Take-Two Dealwatch from Dealscape





Post a comment





The Deal Pipeline

Deal Video


Inside The Deal: Morgan Stanley's Rosenthal on the nitty gritty details of the Smith Barney integration.


More video...

Crisis On Wall Street
Technology
Deals of The Decade

Community

Industry Insight

Loan-to-buy

Paulson's proposal to purchase an equity stake in Yellow Pages publisher Idearc is the second time in recent months an investor group has used its prepetition debt position to execute a bargain price 'exit LBO.'


Industry Insight

Managing your shareholder base

Growth companies and their PE sponsors should be wary of the pitfalls that arise when they layer on tiers of preferred stock.


Industry Insight

Easing the stress of distressed M&A

Corporate buyers face numerous complexities when trying to identify the right moment to purchase a distressed asset.


footspacer.jpg footspacer.jpg footspacer.jpg footspacer.jpg footspacer.jpg


©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.