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Electronic Arts Surrenders Take-Two
by Leigh Alexander
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September 15, 2008
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Electronic Arts says it has decided not to make a bid to acquire Take-Two, and is terminating discussions with the company.
The two companies had signed a non-disclosure agreement to protect their recent closed-door talks, during which EA reviewed Take-Two's management presentation and due diligence to see what per-share value it would support.
Though EA had said it was "hopeful" that the two parties could reach an agreement, the company announced today that "after careful consideration... EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two."
The termination of discussions appears to bring an end to half a year's worth of attempts by EA to acquire its rival, beginning with a $2 billion tender offer in February of 2008 that quickly went hostile, and underwent several extensions and an especially extensive review by the Federal Trade Commission before EA finally allowed the bid to expire last month.
There are a few potential barriers that could have halted the merger on both sides. EA's original $2 billion dollar offer amounted to $26 per share, but the approval of a management compensation package by Take-Two's board relatively early in the process diluted the per-share value to $25.74, an amount chairman Strauss Zelnick repeatedly stressed was "inadequate."
Take-Two's board also adopted a "poison pill" measure that would have taken effect in the event the company was acquired, and the measure was never voted down or removed throughout the long-standing acquisition attempt.
For its part, EA had always stressed the time-sensitivity of its offer, stating that any potential combination needed to take place within a time window that would allow EA to reap benefits from the merger over the key fall and Holiday season.
Alongside the official announcement that the talks had terminated, EA CEO John Riccitiello commented, "EA is tracking toward a record-breaking year. We're launching 15 new games including award-winners like Spore, Dead Space and Mirror's Edge, great new titles from the Sims, new family titles with Hasbro, and the highest quality slate of EA Sports titles on this generation of consoles. We're also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online."
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Look at Take 2's games. GTA 4 was awesome, but hardly innovative. Bioshock was a great game, but its hat is tipped. Civ 4 was fantastic, but iterative. What do you think T2 has that is worth risking 2 billion in capital and possibly more in legal fees from stealing ideas?
T2 - Signature animations
EA - Dynamic DNA and (yes they needed 2 things for this steal) NBA live 365
I dont have to explain these features, do i. Now ea know whats Signature animations 2010 looks like, adjust live for 10 to compete with the number 1 rated so 2011 we've been working on stolen good for 2 years that we can release.
Saints Row, True Crime etc. is to GTA 3, you said 4 give it a year.
Steven Spielberg gave us Boom Blox. Great director needs good material. Great material Bioshock, learn from 1 see where 2 is heading, yes we now know how to make good material.
You ask me whats worth more then 2billion at T2. I answer like this
There is no greater value then knowledge.
If i know what you are going to do next i can prepare for 2010 and use in 2011.
Lastly its not Civ4. Its Sid Meier's and what ever great game you want to put on it.
It Will Wright's Spore, or from the creator of the Sims.
How many bad things have come from statements like that, the co-producer, the writer, the team, that made this good things has just made this bad thing. not sayin spore is bad i like it.
Sid Meier catch blame good or bad.
My name Isaac Lanier and This is how i feel edited.