Take-Two rejects EA's $2 billion


Earlier this month, EA offered to buy out Take-Two for $25 a share which was rejected and then resulted in an offer of $26 a share earlier this week, which was also rejected. Today, they offered to take over the mid-sized publisher for $2 billion. EA is the number one publisher on the planet, but they’ve been losing a little steam since last year and they’re looking to absorb Take-Two before GTA IV is released which is a smart move considering it’s one of the hottest anticipated titles aside from last year’s Halo 3 and this fall’s Gears of War 2. Take-Two isn’t looking to negotiate any such takeover until April 30, the day after GTA IV comes out. Now you might think that TT is solely relying on the GTA series to be worth a damn, but they’re slowly building a rock solid foundation that’s being solidified by titles such as BioShock and 2K sports titles. Besides slumping game ratings based on what metacritic.org has shown about EA, what other reason does EA have to purchase Take-Two?

Well, Activision is hot on their heels and their recent acquisition of Blizzard is certainly going to boost their numbers considering WoW pulls in about $150 million a month.

This is what EA’s CEO John Riccitiello said about Take-Two,

“While the videogame industry remains an attractive, high-growth business, the challenges and risks in the business are escalating, and the need for scale is becoming more pronounced,” EA CEO John Riccitiello wrote to Zelnick on Feb. 19. “Despite steps taken since March 2007 (when Zelnick and Feder took over), Take-Two remains dependent on a limited number of titles, and has limited capital resources. In addition, Take-Two faces ongoing financial, legal and operating issues and a very intense competitive environment.”

Take-Two’s Chairman Strauss Zelnick retaliated with this statement,

“In additional to undervaluing key elements of our business, EA’s proposal fails to recognize the value we are building through our ongoing turnaround efforts, which will further revitalize Take-Two,” he said. “While we have made substantial progress already, the turnaround of our business we commenced in June is not yet compete and we believe its benefits have not been recognized in either our current stock price or in the value of EA’s proposal.”

If you’re still with me then you’ll want to know this too.

In his letter to Riccitiello rejecting the most recent offer, Zelnick warned that if EA took the bid public, Take-Two will “consider all of its alternatives, including discussions with other parties.” Buyers could include other vidgame publishers and also traditional media companies looking to expand into the vidgame biz.

We’ll find out what EA has to say on the matter tomorrow during their conference call. Take-Two will be looking for other suiters in the meantime. This could get interesting and the landscape of the gaming world is going to get rocked.

Press Release [Variety]