Video game publisher Electronic Arts Inc. is once again extending the deadline on its $2 billion tender offer for smaller rival Take-Two Interactive Software Inc. another month, but it hasn't raised its offer, making the deal unlikely to be consummated.
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Redwood City, Calif.-based EA's offer had expired Friday at 11:59 PM. The new deadline, June 16, is the third since EA made its offer public in February. EA's rationale for continuing to pursue the offer despite Take-Two's resistance is to allow the Federal Trade Commission's antitrust review of the proposed acquisition to continue.
However, without an increased offer, Take-Two CEO Strauss Zelnick has made it clear he won't talk, and given the fact that his company's share price is trading above the $25.74 a share offer, who could blame him?
According to Wedbush Morgan Securities analyst Michael Pachter, Zelnick may be seeking as much as $34 a share, but EA CEO John Riccitello may only raise his offer by $2 a share. A $2 increase would put it in line with Take-Two's Friday close of $27.10, where it has hovered for awhile now. While $34 a share would be a 25% premium on Friday's close, it would be nearly a 100% premium from Take-Two's closing price of $17.36 a share on Feb. 22, just before EA announced the original offer.
But the Feb. 22 share price aside, a 25% premium would be in line with the last big video game deal, Activistion Inc.'s merger with Vivendi SA's Blizzard unit. The complex Activision-Blizzard deal involved a $4 billion share buyback at $27.50 a share, which was a 24% premium over Activision's Nov. 30 close of $22.15 a share. - Matthew Wurtzel
For the full story, go to TheDeal.com
See TheDeal's: EA: Clock ticks for Take-Two
See Tech Confidential's: EA: 'We don't need Take-Two'
See Dealscape's: EA, Take-Two far apart on price
See story about Activision from TheDeal.com
