Is EA - Take-Two Deal on the Rocks?

August 18, 2008 -

With its most recent tender offer for Take-Two stock expiring at midnight, EA says that it will not renew the offer. 

It seems, however, that the two companies have been talking. As per a just-issued press release, EA CEO John Riccitiello telephoned T2 chairman Strauss Zelnick on Friday. Zelnick apparently offered to provide EA execs with a secret presentation concerning T2's game schedule for through 2011.

It's unclear what EA's decision not to renew its offer portends. It could be that EA has acquired sufficient T2 stock to seize control. Or, perhaps a new offer with a revised (i.e., lower) price structure is coming. Take-Two stock (TTWO) closed at $24.84 on Friday, nearly a dollar below EA's $25.74 tender offer. As Riccitiello points out, the proposed takeover has dragged past the point where an acquisition of T2 will provide a positive impact for EA's holiday sales, so perhaps the deal is less attractive at this point.

EA also mentioned that the Federal Trade Commission will complete its anti-trust review of the proposed merger by Thursday, August 21st. The press release also included a letter dated today from Riccitiello to Zelnick as well as one Zelnick to Riccitiello dated last Friday:

Here's Riccitiello to Zelnick:

Dear Strauss:

Thank you for taking my call on Friday and for your response letter  on August 17, 2008.

 

As discussed on Friday, given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash. In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season. 

 

Accordingly, we require due diligence to support a transaction and are therefore letting the tender offer expire tonight. However, we are pleased to accept your offer to review your management presentation as outlined in your letter.

 

We continue to have great respect for Take-Two's creative teams and products and are hopeful that we can work together to reach a mutually agreed transaction.

And here's Zelnick to Riccitiello, dated yesterday:

Dear John:

Thank you for your recent expression of interest for Electronic Arts Inc. ("EA") to participate in Take-Two Interactive Software, Inc.'s (the "Company") formal process to evaluate the Company's strategic alternatives. As you know, we have been willing to have EA participate in this process following the successful launch of GTA IV, and we are happy to include EA now.

 

As I mentioned when we spoke on Friday, our process begins with an in-depth management presentation. The Company has made significant strides since EA first expressed interest in the Company and this presentation includes material non-public information to which you would not otherwise have access, including information relating to our three year product release schedule and management's financial projections. The presentation also includes information about the underlying factors that have driven our strong operational and financial performance. I believe our presentation will enable you to understand better the value of our Company to EA.

 

Prior to the management presentation, we will only require EA to enter into a confidentiality agreement. The agreement would be limited to provisions required to comply with federal securities  laws and to ensure the Company's ability to protect the confidentiality of the information shared with you. I can assure you that this requirement is the same as or more favorable to EA than that which we have employed with all other participants in the process.

 

We understand that a number of months have passed since you first expressed interest in the Company and, accordingly, we will act quickly to assist you in moving through our process. Once we execute a confidentiality agreement, we are prepared to schedule the management presentation immediately.

 


Comments

Re: Is EA - Take-Two Deal on the Rocks?

Thanks good job;

Btw, I think Atari and Midway will drop out too, but mostly travesti because  these guys have done nothing travesti or little and need to start saving costs. and dizi izle

YES.

Now I don't have to get off my ass for the important shit anymore!

Whats next, ordering pizza from Xbox live?

Wait... I think that sounds like a good idea.

But I think voting should MAKE you get off your ass, and see outside or a second while you go vote. I mean, your picking the president of the United States of America for God's Sake... least you can do is drive down there and punch out a card.

 

Re: Is EA - Take-Two Deal on the Rocks?

Nintendo is indeed selling SOME of these on the Virtual Console but not even close to all of them. While i agree in part to his piracy he was filling a market that Nintendo failed to recognize. Maybe someone doesnt want to buy a Wii. maybe they just want a console with 50 - 100 NES games on them?? maybe just maybe?

but no Nintendo wants everyone araba kiralama to buy the Wii. thats their excuse but thats not what copyright is supposed to protect. i am real sure that the makers of 10 yard fight were losing sleep because they were missing out on their $0.00025 worth because they didnt get royalties from this player. *smirk*

my question is, should Super Mario Bros. be banned from public domain forever? isnt 23 years enough time for Nintendo to have made their profits?

If you have followed the Steamboat Willie case regarding Mickey Mouse you can rest in your bed well at night knowing that the MOUSE will still be under copyright law, away from public domain after your great grandchildren are in nursing homes. That is beyond ridiculous dont you think??

Gallagher can araç kiralama say all he wants, but I strongly rent a car believe it's due to his crappy leadership and E3 being a joke. ESA's Board of Directors need to find a way to get out rent a car of this horrid contract with this Bush cronie before there's no one left on the Board.

Btw, I think Atari and Midway will drop out too, but mostly travesti because  these guys have done nothing ttnet vitamin or little and need to start saving costs.

YES.

Now I don't have to get off my ass for the important shit anymore!

Whats next, ordering pizza from Xbox live?

Wait... I think that sounds like a good idea.

But I think voting should MAKE you get off your ass, and see outside or a second while you go vote. I mean, your picking the president of the United States of America for God's Sake... least you can do is drive down there and punch out a card.

Re: Is EA - Take-Two Deal on the Rocks?

That's what you get from a company that makes mostly garbage games.. They have to go around buying everyone to trick people into thinking that when a great game comes out, they had something to do with it because there's stupid EA printed on the box..

Re: Is EA - Take-Two Deal on the Rocks?

The main problem with EA is the fact they consider getting a game out 'on time' as more important than releasing a finished product. Personally, I'd rather wait for a few months and get a decent game, even if I would complain a bit at the time, than have some of the half-arsed attempts that EA have pushed out and then had to fix in patches.

Re: Is EA - Take-Two Deal on the Rocks?

chanting:

"EA return to the darkness and the dank from under the rock that spawned thee."

Um did it work?

No? Oh hell. 

I do not want to see EA get their paws/claws/tentacles (Mass effect) in any more game companies.  They have ruined much for gamers all in the name of eternally driving bottomless greed.  Just go away and spend that energy for take overs on developing some good titles and trying to redeem your name. 

Re: Is EA - Take-Two Deal on the Rocks?

You know what? Fuck EA! the only truely good game they made recently was The Godfather. Army of Two was ok but I'm sick of their monopolistic ambitions

Re: Is EA - Take-Two Deal on the Rocks?

Pominator: "As far as sports games are concerned I couldn't Give  f-, I think the only one I have is Fight Night round 3, and thats an EA game, so I won't be too concerned about EA monopolising a scene that doesn't interest me."

Prominator, it's clearly obvious that when it comes to the sports genre that you're the minority in this.....so stay the "F" out of the conversation!!  You clearly have know idea what a sports game is if all you have is Fight Night.  That game sucks nut juice.

Your soul is a tasty refreshing treat to ones such as I

Re: Is EA - Take-Two Deal on the Rocks?

Annon, Why don't you back off of Pominator. He's not the minority. A lot of people don't like sports games. Just cuz he only has one sports game doesn't mean that he doesn't know what one is. Sports games for the most part in my opinion suck ass. You really need to know what your talking about before you open your fat mouth/type with your fat fingers.

Re: Is EA - Take-Two Deal on the Rocks?

That's why they're in the middle of developing a fourth one right? Don't like realistic depictions of pugelistic orgies? He simply stated that he owned the only sports game he was interested in. What's so wrong about that? I am actually the same way. I have Fight Night Round 3 and I love it with a passion. I've owned previous Madden games and hate them all.


Less insults and more constructive conversation thanks.

Re: Is EA - Take-Two Deal on the Rocks?

Huh, I guess EA finally decided to make their offer more flexible. i.e. willing to offer a higher price.

-Gray17

Re: Is EA - Take-Two Deal on the Rocks?

If EA gets ahold of T2, you can say hello to GTA: Snuggly Island!  Kill with kindness!

Re: Is EA - Take-Two Deal on the Rocks?

I'm not sure why people keep saying things like this. Good game or not, EA did produce Army of Two. Have you played that? Yeah..Just as bad as GTA.

Re: Is EA - Take-Two Deal on the Rocks?

As far as sports games are concerned I couldn't Give  f-, I think the only one I have is Fight Night round 3, and thats an EA game, so I won't be too concerned about EA monopolising a scene that doesn't interest me, however if they start putting the hurt on GTA, then I will be angry!

This one still reckons EAPartners is the way to go for smaller developers, you know, keep your friends close and your enemies closer?

Your soul is a tasty refreshing treat to ones such as I

chick chick chick chick chickeeeeen lay a little egg for meeeeee!

Re: Is EA - Take-Two Deal on the Rocks?

Awesome. Take Two wins. Long live GTA IV

Re: Is EA - Take-Two Deal on the Rocks?

This deal will be especially bad for sports fans.  If the EA-T2 deals goes through, then you can pretty much kiss the 2K sports series goodbye.  That doesn't just mean football, it means baseball, basketball, hockey, tennis ect....  Pretty much any sports game that T2 ever had would probably go the way of the dodo bird, and EA would probably have the 2K developers making the EA sports games for them since EA is too F'n lazy to do it themselves.

Re: Is EA - Take-Two Deal on the Rocks?

Wouldn't it be better for T2 to pull an EPIC and work into the EAPartners programme?

Your soul is a tasty refreshing treat to ones such as I

chick chick chick chick chickeeeeen lay a little egg for meeeeee!

Re: Is EA - Take-Two Deal on the Rocks?

@Cheater87

Manhunt 2 is already out... have you been living with your head up your ass?  Did you totally miss the media frenzy? 

As for EA acquirng T2, I have a feeling that such an acquisition would lead to less quality product from Take Two, things being rushed out the door for a quick buck, and things being made without all the coding intact (Battlefield Bad Company seems like one of these games, mainly because for some reason after you shoot someone, even in the single player game, it takes them quite a while to die, no matter what distance they are.  Also, you have a 50 round mag for all AR's, which makes no fucking sense). I'm not suggesting that everything EA makes is bad, but they do have a tendency to rush things for profit and not care so much about quality.

Re: Is EA - Take-Two Deal on the Rocks?

"Manhunt 2 is already out... have you been living with your head up your ass?  Did you totally miss the media frenzy?"

Except if you live in europe in which case it isn't out until the 29th of this month.  This is why being abusive to people like a smart arse leaves you open to people like me who like to point out how wrong you are.

Re: Is EA - Take-Two Deal on the Rocks?

Considering the fact that this site is mostly AMERICAN game politics, you should've heard at least something about the controversy surrounding the game already being released.  If you completely missed the controversy, chances are you live with your head up your ass.

So even if you haven't played the game, you should be aware that its out in other parts of the world.  Case in point, I haven't played Persona 4 yet, but I know it's out in Japan.  Why?  Because I DON'T live with my head up my ass.

Re: Is EA - Take-Two Deal on the Rocks?

You seem to be obsessed with putting your head up people's arses.  No matter.  The mere fact you have repeated that comment about 4 times in 4 paragraphs just shows a lack of any original thought.

Also, I see nothing that states this is about America.  Infact the last month it has been mostly about Thailand and the UK, even Dennis believes that the "UK is the battleground for gaming", though I think that is somewhat overstated.

Besides which, your response all came about from him typing Manhunt 2 instead of Manhunt 3.  It could have just been a simple typo but you chose to be a prat over it.  His general point that EA would censor T2 if they were to succeed in a takeover stands true.

Re: Is EA - Take-Two Deal on the Rocks?

If you wont say it I will.  Everything EA makes is bad, because even if it is a good game, it is tainted by EA's touch and greediness supporting their poor business practices.  (and they have had fewer games rated 10/10 in realation to how many games they make than any other major game developer or publisher out there by a long shot.)

Buy used games from EB, GameStop, GameFly, Ebay, and other locations if you want EA games and dont want to support EA's ways.

Re: Is EA - Take-Two Deal on the Rocks?

If EA gets Take 2 then we can say goodbye to GTA V and Manhunt 2. They will pull a Thrill Kill on them and have them cancelled. :'(

Re: Is EA - Take-Two Deal on the Rocks?

Hey now...  we know what will actually happen.

Manhunt: A time to cook with Emiral!
GTA: Ambulance Run! (after they take it out of GTA V)
Bully: 1st Grade Math Edition!

What other titles will they make....   hum...

Re: Is EA - Take-Two Deal on the Rocks?

I hope EA doesn't aquire T2.  I don't mind big publishers, but I want to see more than just two large publishers duking it out.  As it stands right now the only contenders are EA, Blivendivision, T2, and Ubisoft.

Re: Is EA - Take-Two Deal on the Rocks?

Don't forget Atari and THQ, they aren't doing great but they're still out there.

Re: Is EA - Take-Two Deal on the Rocks?

Damn, forgot about THQ.  :)  Yeah, they are doing alright.  Not great but they do have a few strong titles coming out.  Their RTS lineup is fantastic.

Atari, though, is pretty much dead I think.  Or, at the very least, mortally wounded.

Re: Is EA - Take-Two Deal on the Rocks?

Dawn of War 2 must be close to release now, that should line THQs pockets nicely.

Re: Is EA - Take-Two Deal on the Rocks?

Man, this sucks...  I was hoping this was never going to come to reality, but I guess EA got it's way again...  When is someone going to grow the balls to step up to EA and their poor business practices?

 
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