1 item from 2008
18 August 2008 1:00 PM, PDT | The Hollywood Reporter - Movie News | See recent The Hollywood Reporter - Movie News news »
Electronic Arts said that, after several extensions, it would let its bid of $25.74 a share expire at 11:59 p.m. Monday and instead take a friendlier approach to acquiring Take-Two Interactive Software.
During the weekend, according to correspondence made public Monday, Take-Two executive chairman Strauss Zelnick negotiated with EA CEO John Riccitiello the rules for an equitable courtship.
Most significantly, Take-Two will include EA executives in a strategic review, whereby the former will share nonpublic portions of its three-year plan with the intent of convincing EA that it should increase its bid for the smaller rival.
In a further sign that an acquisition could be forthcoming, the Federal Trade Commission is expected to tacitly approve a merger of the two as early as Thursday.
It's not exactly a done deal, though, and Riccitiello made it clear he'd rather have closed the acquisition in time to benefit from Christmas.
"We no longer believe we can integrate Take-Two ahead of the important holiday season," Riccitiello wrote in a letter to Zelnick dated Monday.
EA first notified Take-Two of its interest in an acquisition last year, though Wall Street didn't learn of an offer until February, causing a 55% spike in Take-Two shares in a single day. If EA walks, investors fear Take-Two shares could head back into the teens. They closed 4.4% lower Monday to $23.75.
EA, the world's second-largest video game company by market cap behind Activision Blizzard, reported $3.7 billion in revenue in its most recent fiscal year, compared with Take-Two's $982 million.
Analysts were busy handicapping the latest moves in the ongoing saga, with some guessing that EA would sweeten its offer, but only to $27 a share. More bullish ones expected something closer to $30. »
- By Paul Bond
1 item from 2008
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