Co. wanted 'GTA,' other games for the holidays
Nearly six months after starting a public battle to take over the “Grand Theft Auto” publisher, Electronic Arts has withdrawn its $2 billion tender offer for Take-Two Interactive to enter private negotiations.
EA is believed to have received little interest in its bid of $25.74 per share, which has actually been less than Take-Two’s trading price some days this summer. It let the offer expire at 12 a.m. today.
In a letter to Take-Two executive chairman Strauss Zelnick sent on Monday, EA topper John Riccitiello said his company was withdrawing its offer because it was contingent on integrating “Grand Theft Auto IV” and other games into EA’s slate for the holiday season, which is no longer possible.
“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,” wrote Riccitiello.
Zelnick replied in a statement Monday that he and the rest of the board still believe EA’s bid undervalued the company but that they welcome including EA in a formal process Take-Two is undertaking to consider strategic alternatives, including acquisitions. Take-Two is understood to be talking to several potential suitors or partners, including both videogame publishers and traditional media companies as part of that process.
In a letter sent to Riccitiello on Sunday, Zelnick noted that the process will start with a presentation to EA management that includes confidential information on his company’s three-year release plan and financial projections. “I believe our presentation will enable you to better understand the value of our company to EA,” he wrote.
The two execs’ agreement, to which they came during a phone call Friday, could be a precursor to a new acquisition agreement at a higher price than EA has offered thus far. Such a deal would first need the approval of the Federal Trade Commission, which is currently reviewing the potential combination. It is scheduled to finish its investigation, which is largely about the merging of the two publishers’ similar sports videogames lines, by Thursday.
EA first made an unsuccessful bid to take over Take-Two last winter, soon before Zelnick and his team took over the company. They then started the current process last December, with Riccitiello making increasing offers that were rebuffed by Take-Two before EA finally went public in February and then turned the deal hostile in March.
If the acquisition were to happen, it would give EA, which is short on wholly owned franchises, one of the biggest in the form of Take-Two subsid Rockstar’s “Grand Theft Auto.” It would also eliminate the biggest competitor to its EA Sports brand.
Take-Two stock closed down 4% at $23.75. EA shares were down 1% at $47.76.