More than half a year of corporate drama drew to a close on Sunday as Electronic Arts ended its quest to acquire “Grand Theft Auto” publisher Take-Two Interactive.
After reviewing private presentations from Take-Two management, EA declined to make a new bid. Its previous offer of nearly $2 billion was repeatedly turned down by Take-Two execs and then shareholders.
EA CEO John Riccitiello had previously said he thought Take-Two was declining in value as the lucrative Christmas season approached. Apparently he and his team did not learn anything from Take-Two’s presentations, which were covered under non-disclosure agreements, that convinced them differently.
“They made their tender offer numerous times while we have continued to beat our guidance and put out hit games, so you can draw your own conclusions,” Take-Two executive chairman Strauss Zelnick said when asked why the two sides couldn’t reach a deal.
He added that Take-Two remains in talks with several other undisclosed companies about a possible acquisition or strategic partnership. It’s believed those suitors include videogame publishers and traditional media congloms.
Given its relatively small size and the value of key properties like “Grand Theft Auto” and “Bioshock,” as well as its 2K Sports label, Take-Two remains one of the likeliest acquisition targets in the consolidating videogame biz.
EA has been pursuing Take-Two on and off for about a year and a half, starting in early 2007, just before Riccitiello and Zelnick took their respective posts. Companies re-started talks in December. When they couldn’t reach an agreement, EA took its $2 billion bid public in February and turned it into a hostile tender offer in March
Deadline for approval by shareholders was extended five times all the way through August, but generated little interest. At that point, EA re-entered private discussions with Take-Two, which ended this weekend.
The “Madden NFL” maker, which remains the largest third party videogame publisher outside of Japan, was primarily interested in “Grand Theft Auto” and 2K Sports, the biggest competitor to its own EA Sports.
Though Take-Two is now off the table, EA remains on the hunt for other acquisition targets.
“I think you’ll see us continue to be an acquirer around two strategic goals: developing a very strong core pipeline of games and expanding our direct-to-consumer and online strategy,” said senior veep of corporate strategy Owen Mahoney.
Under Riccitiello, EA has re-organized itself into four divisions and focused on developing original properties like the upcoming “Dead Space” and “Mirror’s Edge,” as well as Internet-connected games it can deliver directly to consumers such as “Warhammer Online,” which launches this week.
For its part, Take-Two is focused on a version of “Grand Theft Auto” for the Nintendo DS that will launch later this year or in winter, a sequel to “Bioshock” skedded for 2009, and its successful new casual franchise “Carnival Games.”