Will open up to offers after 'GTA IV' release

Take-Two Interactive said no to Electronic Arts again on Wednesday but is throwing the door open to interested parties in a month.

Vidgame publisher officially recommended that shareholders reject EA’s $2 billion bid but said it will begin discussions on April 30, the day after “Grand Theft Auto IV” is released, with several potential suitors who have been in touch since the EA bid went public.

“We will commence formal discussions on April 30 and, if appropriate, negotiations because we think we will be in the best positions from a timing perspective and value creation perspective,” executive chairman Strauss Zelnick said in a presentation to analysts.

Though he didn’t name names, Zelnick confirmed that Take-Two has had “expressions of interest from numerous parties” and later indicated that they include both other vidgame publishers and traditional media companies.

Zelnick reiterated that he thinks EA’s bid undervalues his company compared to similar acquisitions and that Take-Two needs to focus its energies on the “GTA IV” release. However, he also claimed that Take-Two is not yet fully valued for the turnaround his management team has implemented since taking over a year ago or for the pending success of “GTA IV.”

“We think EA’s unwillingness to wait what amounts to several weeks to negotiate with us and instead pursue a hostile course is evidence they see the same value we see that we don’t think market actually sees yet,” exec stated.

Though Zelnick’s team has reduced costs and reorganized some operations, Take-Two hasn’t yet made progress toward turning a profit in recent quarters. It’s certain to do so after “GTA IV” comes out, though the publisher has traditionally had trouble making money in years when there isn’t a new “GTA” game, an issue Zelnick said is being addressed.

He also claimed that EA’s bid doesn’t reflect the synergies it would enjoy from a combination with Take-Two, which could amount to between $50 million and $210 million.

In a statement, EA refused to budge from its current offer or the insistence that the deal begin soon.

“It is regrettable for stockholders that Take-Two’s Board of Directors has not accepted EA’s offer,” company said. “EA’s tender offer is a clear process for Take-Two stockholders to maximize the value of their investment. By advising its stockholders to reject the offer, Take-Two’s Board is exposing them to further delays which may reduce the value and the certainty of a potential transaction.”

EA first made a private bid for Take-Two last month. After it was rejected and publicly disclosed by Zelnick and his board, EA later turned the offer hostile, making it a $26 per share tender offer available to all stockholders. Given the Take-Two board’s recommendation, which it said was supported by financial advisers Bear Stearns and Lehman Brothers, it appears unlikely that shareholders will accept the bid, which expires April 11.

Just to make certain, however, the board adopted a so-called poison pill that would make it all but impossible for EA to acquire more than 20% of its shares. Plan will be in effect for only 180 days, enough, Zelnick said, for the board to “consider all strategic alternatives for maximizing value for Take-Two shareholders.”

Take-Two shares closed up a fraction at $25.91 Wednesday. That the stock price didn’t fall indicates that shareholders think Take-Two can reach at least the value of EA’s bid either on its own or with another buyer. Take-Two shares skyrocketed last month after EA’s bid was disclosed.

EA stock closed down 1% at $49.46.

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