July 10, 2008
The New York Times' Deal Book blog speculates today that Activision Blizzard may be eyeing an acquisition of Grand Theft Auto publisher Take-Two Interactive.
Electronic Arts, of course, has been chasing T2 for most of 2008 and has a tender offer outstanding. EA's problem, however, is that T2 shareholders just aren't jumping on board so far.
Analyst Mike Hickey of Janco Partners told the Deal Book:
We absolutely believe Activision will take a look at Take-Two. If a competitor is for sale, you take a look, and if EA is your real rival, why wouldn't you stir the pot a little bit?
However, UBS Securities analyst Ben Schachter pooh-pooh any such deal:
It is highly unlikely that Activision would try to outbid EA. They have enough on their plate at the moment.
The oft-quoted Michael Pachter of Wedbush-Morgan had his own opinion:
There are only three players involved — EA, the FTC and the arbs. Is EA likely to withdraw or lower their offer? No, because they want Take-Two. The odds of the FTC not approving the deal on market concentration is virtually zero. And if the arbs want to sell the stock, they'll sell the stock — they don't care what [T2 chairman] Strauss Zelnick thinks the stock is worth.
Comments
Re: With Vivendi Merger Complete, Will Activision Make a Run at
http://uk.gamespot.com/news/6193619.html?part=rss&tag=gs_news&subj=6193619
Interesting article here about Activision/Blizzard. Particuarly the last paragraph.
Personally, I think it's a bit too soon to get hopeful, there's a lot of organizing needed after a merger, but the ball isn't quite out of the court yet...
Re: With Vivendi Merger Complete, Will Activision Make a Run at
The odds of the FTC not approving the deal on market concentration is virtually zero.
The FTC has already telegraphed that it's focused on the sports market and, whether or not one agrees that the "sports game market" is the relevant one, I believe EA will have more than 80% if it swallows Take Two. That's the sort of number that this entire pre-approval process is supposed to prevent. The FTC has run its second request and the process will play out, but the existence of a second request is a good sign that things are going to be expensive and time consuming, regardless of the outcome, thus testing EA's devotion to the deal. It would be most interesting if the FTC requires a spin off, but that's a little too textbook to actually happen.
As for Activision "making a run" at Take Two, maybe they could do some sort of white knight offer; however, I can't imagine their existing shareholders (or lenders) being too pleased with two acquisitions in quick order in this climate.
Re: With Vivendi Merger Complete, Will Activision Make a Run at
It'd certainly be better than EA getting them.
Re: With Vivendi Merger Complete, Will Activision Make a Run at
yes once again, stop quoting patcher. only way the guy will no longer be relevant is if he stops getting quoted.
Re: With Vivendi Merger Complete, Will Activision Make a Run at
There are only three players involved — EA, the FTC and the arbs. Is EA likely to withdraw or lower their offer? No, because they want Take-Two. The odds of the FTC not approving the deal on market concentration is virtually zero. And if the arbs want to sell the stock, they'll sell the stock — they don't care what [T2 chairman] Strauss Zelnick thinks the stock is worth.
Correction, there are three players, EA, the FTC, and Take Two. Take Two has recommended to it's shareholders that the current offer be rejected as undervaluing the company. Contrary to what Mr. Pachter says, obviously the majority of the "arbs" do care what the chairman that they appointed thinks, as they haven't lept at EA current stale offer.
Really, at this point I'm starting to wonder what axe Pachter has to grind with Zelnick. Everything he's said thus far amounts to "Zelnick's wrong/making it up/full of it and isn't going to matter, Take Two's gonna cave."
Which is contrary to some notable stubborness on Take Two's part, and skeptism by other analysts.
-Gray17
Re: With Vivendi Merger Complete, Will Activision Make a Run at
I'm going to have to agree with Ben Schachter on this one. Activision Blizzard has an aweful lot of work to do in completing all things concerning their merger, couple this with them stepping out of the ESA and trying to get something like that set up internally, i think they'll have enough on their plates at the moment.
I would much rather see Activision Blizzard take over Take2 then i would EA, but it's not really up to us. Shareholders are the only ones in power.
Re: With Vivendi Merger Complete, Will Activision Make a Run at
"If a competitor is for sale"? Last I checked, this was a hostile takeover. I don't recall Take-Two ever being for sale. Not too mention, with EA already acquiing a portion of the stocks anyways, I think it'd be a bit harder for anyone else to just barge in and join the hostilities.