EA’s Take-Two Bid Goes Hostile

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March 13th, 2008 posted by Link in General News

Publishing giant EA originally proposed to buy out Take Two in the last week of February. Take Two flat out rejected the offer and said that they didn’t want to begin any talks until after the launch of a little game coming out in April called GTA IV. Today, EA has decided that if Take Two’s current board won’t accept the offer that they’ll go a different route: an all-cash tender offer to the shareholders. What does this mean? Basically, an all-cash tender offer is when a company offers to buy stock from shareholders for designated amount (in this case, $26 a share) regardless of what the share price is at the time of the transaction. The offer is good until April 10. EA’s hope is that enough shareholders will sell out and that they’ll be the majority shareholder when the next shareholder’s meeting rolls around, where they could vote out the current board of directors and put in their own people to accept the offer.

EA’s plans for Take Two are quite different from the recent Bioware/Pandemic buyouts, as the Take Two studios would be assimilated into EA’s brands instead of remaining independently operated.

This isn’t the first time EA has attempted a hostile takeover, so it’s not the end for Take Two just yet. Remember Ubisoft a few years ago? EA still owns over 20% of the company, but they aren’t the majority shareholder. As of the time of this writing, Take Two’s stock is at $25.50 per share and rising, so the $26 offer isn’t a huge premium and will likely be less than the stock’s trade value by the end of the day. We’ll know in the upcoming days whether or not shareholders are biting. I particularly like Joystiq’s description of EA as a “corporate katamari.” After meeting a ton of really great people from EA at GDC, it pisses me off to see their company be such a dick sometimes.

[Link] - EA Press Release
[Link] - SmartMoney article