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Kicking off June, EA looked closer to meeting the Federal Trade Commission's review for the deal, days after announcing plans to move ahead with another deal: Hand-On Mobile Korea. Take-Two reiterated June 5 it's reviewing its options and there are interested parties, but many onlookers expect EA will come out on top though a price bump is likely, The Deal's David Shabelman noted.
On the regulatory front, Shabelman wrote:
Take-Two publicly refused to enter merger talks with EA before the
release of its "Grand Theft Auto IV," a video game promising to deliver
blockbuster sales. The game debuted
April 29 to long lines and positive reviews. But, as The Deal's David
Shabelman noted: "Despite the hubbub surrounding the release, analysts
said EA had already factored in the projected banner sales from the
game into its offer for Take-Two." EA extended the tender offer
deadline, which was set to expire April 18, to May 16, only to extend it again, to June 16. The extension came after Take-Two shareholders approved an amendment to the company's incentive plan, which allows for the issuance of $1.5 million shares of restricted stock to its management firm, ZelnickMedia Corp. Take-Two advised its shareholders March 26 to reject EA's $2 billion offer (the would-be buyer stood firm on the offer two days later). As The Deal's Donna Block noted, Take-Two called EA's hostile offer "inadequate," "opportunistic" and contrary to shareholder interests. And in an attempt to protect itself, Take-Two moved its upcoming annual shareholder meeting to April 17 from April 10 and amended its bylaws to give shareholders more time to nominate board members. The move follows Electronic Arts strategy to go hostile with its takeover proposal for Take-Two. The company on March 13 launched a $26 per share tender offer for the "Grand Theft Auto" publisher nearly three weeks after publicly disclosing its bid had been rejected.Meanwhile, much ensued over the first few months of 2008:
The Feb. 24 rejection was made for the second bid EA had put forth for the target, having raised to $26 per share its $25 per share proposal from Feb. 15, which it had rejected. As Dealscape's George White pointed out, the board's rebuffing of the offer as undervaluing the company is sort of ironic:
THE LAST BATTLE On March 29, 2007, shareholders and management vying for control of New York video game developer Take-Two faced off to determine the company's future. For most of the then-sitting board and now-ousted CEO Paul Eibeler, it was the end of the game. Days later, the company's chief financial officer, Karl Winters, resigned. WINNERS AND LOSERS Going into the late-March 2007 meeting, things didn't look good for management as poor financial results, an accounting scandal and shareholder suits plagued the gamer. The shareholder group comprises asset management firm OppenheimerFunds Inc. of New York, which alone holds a 24.5% stake in the Take-Two, as well as SAC Capital Management, Tudor Investment Corp., D.E. Shaw Valence Portfolios LLC and ZelnickMedia Corp. Displaying shareholder activism at its finest, the group, which holds 46% of the company, unleashed their plan for overhaul earlier in March.
In another set of blows to management working up to the meeting, proxy advisories rallied behind shareholders.
Earlier in March, UniCredit Group said in a regulatory filing it had raised its stake in the game publisher from 7.3% to 10.3%. The same day, the Oppenheimer-led group's intentions were made public.
TROUBLE STILL Take-Two, which is known for Grand Theft Auto, and not much else, has taken strategic missteps as well and could need more than a board overhaul to fix its problems, one analyst told Kate Gibson. Trying to compete for share in professional sports video games was a mistake, he said, where rival Electronic Arts Inc. enjoys 75% of market share. Because of the stock options trouble, several years of Take-Two earnings need to be restated. For the first quarter ended Jan. 31, 2007, Take-Two said it lost $21.5 million on $277.3 million in revenue. A year earlier, the company said it lost $29.1 million on sales of $265 million. - Carolyn Murphy and Gerald Magpily
CategoriesComments
From: Matthew Wurtzel,
Gordon, The purpose of Dealwatches are to offer a history of a company's dealmaking. While everyone is caught up in the hoopla of GTA IV, the takeover by Strauss Zelnick and the activist investor group of Take-Two also set the stage for EA's bid. Consequently, its important to keep this information in the Dealwatch, and not simply start from the point of EA taking the offer public. As for the issue of revenues, the figures are added when quarterly earnings reports are officially announced. Also, those details would only be include when relevant to a merger or acquisition. The sales figures for GTA IV, while relevant to EA's offer, are not official at this time -- after all there is no SEC filing yet. Consequently, we have not added the figures to the history. Finally, Dealscape is neither a technology blog (visit our sister site Tech Confidential) nor a gaming Web site, which is why there is no review of the game and its technical merits. However, we do make light of the reviews, saying they were positive. I suppose we could have used stronger language to illustrate the high marks it received. Nonetheless, these details are simply footnotes, since we already make clear that the GTA property is the main attraction for EA's bid. Thanks,
Posted on:
May 2, 2008 2:11 PM
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The saga of Take-Two Interactive Software Inc. and Electronic Arts Inc.'s $2 billion bid for its rival wages on. The nagging question: 
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This analysis is garbage. It focuses on past done deals and negative passed and completed and paid for actions and gives us nothing for the future. This article is a stupid waste of space to justify a reporter's job. You said nothing and did no research about current sales figures, which in the UK alone in one day would wipe out the debt. The future phases of the game and interactive features, advances, superior ratings, are not mentioned. That fact that the game is selling in record numbers worldwide are not mentioned. You did not take into consideration the true sales figures, you just stated that EA already factored it in-but their offer shows that they did NOT factor the true success if the product in. The sales alone should give the company more than 2 billion $$- Do some homework and tell us the truth. The stock has some legs if the product continues to sell like this.