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It was announced yesterday that the Board of Directors
at Take-Two Interactive have rejected a take-over bid by Electronic
Arts. EA’s lawyers proceeded in a hostile take-over by contacting
Take-Two’s shareholders directly. It was recommended that the
shareholders do not surrender their shares at the offered $26.00 per
share, a total of $2 billion.
As a particularly unsubtle move on behalf of both
publishers, Take-Two have announced they will begin a “Review of
Strategic Alternatives” after the release of RockStar Games’
cash-cow Grand Theft Auto IV. Strauss Zelnick, Chairman of
the Board of Take-Two, commented, “Take-Two's Board of Directors and
senior management team were put in place less than one year ago with
one mandate: maximize stockholder value. We have maintained a
single-minded focus on that goal ever since and it remains the
guiding principle in every decision we make with regard to Take-Two.
Our Board, after careful review, has unanimously determined that
Electronic Arts' offer continues to provide insufficient value and
remains opportunistically timed to capture the value of the upcoming
Grand Theft Auto IV launch at the expense of our
stockholders.”
Electronic Arts have made no secret of their interest in
acquiring Take-Two and, perhaps more importantly, RockStar Games.
The Grand Theft Auto series has sold over sixty-six million
units worldwide to date, and the fourth in the series is guaranteed
to break records.
The Board of Directors at Take-Two was put in place less
than one year ago, with the specific programme of increasing the
value for shareholders. “With one of the strongest portfolios of
intellectual property in our business, a superb creative and
business team, and a revitalization plan that is beginning to
deliver results, Take-Two is uniquely positioned to create
stockholder value in an industry that is enjoying the highest growth
rates of any entertainment medium. We are effectively working toward
a process to review all available options to maximize this value,
either as an independent company or in combination with a third
party, and are open to beginning informal discussions starting now.
Our stockholders' interests would hardly be served by accepting an
offer from EA at the wrong price and the wrong time. As a result,
the Board recommends that stockholders not tender any of their
shares to EA.” added Zelnick, who presented at the Bank of America
2008 Smid Cap Conference later in the day.
It may be obvious to any gamer that this is the
prime-time for EA to buy-out Take-Two and seize ownership of the
imminent record breaker, and the worst possible time for
shareholders to relinquish their investment, however it is important
to realise that these shareholders may not necessarily be gamers
themselves, and may not even be aware of the Grand Theft Auto
franchise.
Take-Two announced a series of legal applications, most
of which are jargon to prevent EA – and other interested
third-parties (which may or may not exist) that Take-Two have stated
have since contacted the company – from seizing control of the
company should any one shareholder control more than twenty percent
of the company. |
