EA Allows Take-Two Takeover Bid to Expire, Reopens Discussions With Take-Two Management

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Electronic ArtsElectronic Arts' off to acquire all the outstanding shares of Take-Two Interactive at $25.74 per share expires today. Since a sufficient number of Take-Two Interactive shares have not been tendered to Electronic Arts to allow for a takeover of the company, Electronic Arts now plans to allow its tender offer to expire at the end of the day. EA is, however, reopening talks with the management of Take-Two Interactive concerning a possible acquisition.
In a letter from John Riccitiello, EA's Chief Executive Officer, to Take-Two Interactive, EA wrote, "As discussed on Friday, given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash. In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season. Accordingly, we require due diligence to support a transaction and are therefore letting the tender offer expire tonight."

Because Take-Two Interactive doesn't want to move forward with discussions without a non-disclosure agreement, the two companies are currently negotiating such an agreement. It is unlikely we will hear further from the companies until discussions come to an end.

Clearly, Take-Two still expects to receive a considerably higher bid from EA than it has received. While EA is clearly still considering a transaction (and hence has agreed to negotiate a confidentiality agreement), EA is using language suggesting that EA is unconvinced a transaction will result from these discussions. Given that EA resorted to a hostile bid offer after the first round of discussions, this is hardly surprising.

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This page contains a single entry by Editor published on August 18, 2008 5:10 AM.

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