Inadequte takeover bid, says Take-Two
Take-Two Interactive Software has rejected an Electronic Arts proposal to acquire the company for a cash offer of US$26 per share (approx $2bn), describing it as "inadequate in multiple respects and not in the best interests of Take-Two's stockholders".
The board of directors at Take-Two believes that Electronic Arts has severely undervalued the company and its game franchise, which include the enormously popular Grand Theft Auto series, the 2K Sport’s brand and franchises such as Elder Scrolls, Civilisation and Bioshock.
"We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry. Furthermore, the offer values the Company at a significant discount to its public peers and does not compensate Take-Two for its intrinsic value and the substantial synergies that the proposed combination would create," reads the official statement.
Take-Two has said that it will enter into dialogue with Electronic Arts but only after Grand Theft Auto IV has been released.
"Given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released. Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release). We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA's refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders," commented Strauss Zelnick, executive chairman of the Board of Take-Two.
Take-Two Interactive has also published letters detailing the proposal that have been going back and forth between Mr Strauss Zelnick and EA's CEO, John Riccitiello.
The letters make for a very interesting read, you can view them in full overleaf.
UPDATE: 25/02/08 - EA has launched a website explaining why they feel the takeover is beneficial to all. Visit the website here