Site Meter 1P Start » Blog Archive » EA Wants Take-Two for $2 Billion

EA Wants Take-Two for $2 Billion

by PacoDG

In some crazy ass news to come out on a Sunday, Yahoo has posted a press release in their business section outlining EA’s proposal to buy Take-Two Interactive (Bioshock, Manhunt, All Rockstar Games like GTA/Bully/etc) for $26 per share. The stock is, as of me writing this, at $17.36, however the pre-market value has already shot up in light of this news (at $25.61, however see here for the most current price).

EA CEO John Riccitiello had this to say on the offer, “Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.

Originally the offer was for $25 per share, but has moved up to $26 in a letter that you can read in full below (which I suggest checking out, you can feel how strongly EA wants Take-Two. What does this mean for us? I honestly cannot tell the future on this one. The obvious way of thinking is “NOOOO.. NOT EA!!!!!!!” …and I am trying to find reasons to put a counter argument as to why it would be for the good of mankind to have EA buy up every single great game studio, but I can’t think of one, all I have on my mind is a watering down of great titles like Bioshock, with a sequel coming out once a year. I can’t wait to see how this plays out, for now, check the full press release after the break:

Electronic Arts Proposes to Acquire Take-Two Interactive Software for $26 Per Share in Cash, or Approximately $2.0 Billion
Sunday February 24, 2:00 pm ET
Proposal Represents 64 Percent Premium to Take-Two’s February 15th Closing Price and 63 Percent Premium to Take-Two’s Closing Price Over the Previous 30 Days

REDWOOD CITY, Calif.-(BUSINESS WIRE)-Electronic Arts Inc. (“EA”) (NASDAQ: ERTS - News) today announced that it has proposed to acquire Take-Two Interactive Software, Inc. (“Take-Two”) (NASDAQ: TTWO - News) in an all-cash merger valued at approximately $2.0 billion.

EA’s proposal of $26 per share in cash represents a premium of 64 percent over Take-Two’s closing stock price on Feb. 15th, the last trading day before EA sent its revised proposal to Take-Two, and a 63 percent premium over Take-Two’s 30-day trailing average price over the thirty trading days ending on that date.

EA’s proposal was contained in a letter sent on Feb. 19th by EA Chief Executive Officer John Riccitiello to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two. The Take-Two Board’s subsequent rejection of the EA proposal led to EA’s decision to release the letter and bring its proposal to the attention of all Take-Two shareholders.

Mr. Riccitiello said today: “Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.”

The EA letter warned that further Take-Two delay in accepting EA’s proposal could prevent Take-Two’s shareholders and other constituents from realizing its benefits. “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today,” Mr. Riccitiello wrote. The letter added that timely completion of the proposed transaction would allow EA’s strong publishing and distribution network to positively impact the ongoing post-launch sales of GTA IV and support the new Take-Two titles scheduled for launch later in the year and during the holiday selling season.

As noted in EA’s Feb. 19th letter, EA’s proposal is not conditioned on any financing requirement. It is, however, subject to certain customary conditions as set forth in the letter. EA’s $26 per share proposal is based on the current equity capitalization of Take-Two. Although EA indicated in the letter that its proposal was subject to negotiations commencing by Feb. 22nd, EA intends to keep its proposal open for the present to give Take-Two’s shareholders and Board of Directors further time to consider it.

The full text of EA’s letter to Take-Two follows:

February 19, 2008

Mr. Strauss Zelnick
Executive Chairman of the Board of Directors
Take-Two Interactive Software, Inc.
622 Broadway
New York, NY 10012

Dear Strauss:

Thank you for your letter of February 15, 2008. While I appreciate its courteous tone and value our ongoing dialogue, I am disappointed that you have rejected Electronic Arts Inc.’s (“EA’s”) $25 per share cash offer to acquire Take-Two Interactive Software, Inc. (“Take-Two”) and declined to engage in the friendly negotiations we proposed. We continue to believe that an acquisition of Take-Two by EA is in the best interests of your shareholders, employees and other constituents, and we remain interested in acquiring Take-Two. So, to further demonstrate our seriousness and encourage you to move forward now, I am writing to increase EA’s offer to acquire all of the outstanding shares of Take-Two to $26 per share in cash. This offer is subject to Take-Two agreeing by February 22, 2008 to commence negotiation of a definitive merger agreement and to permit EA to commence a limited due diligence review of Take-Two.

Our revised all-cash offer represents a 64% premium over Take-Two’s most recent closing price and a 63% premium over Take-Two’s 30-day trailing average price (based on prices as of market close on Friday, February 15th). We believe our offer represents a unique and compelling opportunity for Take-Two shareholders to maximize the value of their investment in the company, with materially lower risk than if Take-Two proceeds on a stand-alone basis.

We also believe that the transaction we are proposing represents a uniquely attractive opportunity for Take-Two’s creative teams and key employees. EA is a diversified leader with well-established franchises and proven intellectual properties, global reach, and significant financial resources. I know we both agree that Take-Two’s talented creative teams deserve a permanent home within a stable and growing publisher that provides these teams an environment to do what they do best – create great games. EA is organized in a four-label model that provides our creative teams the autonomy they need to fully realize their creative ambitions, while also providing a stable and supportive corporate and publishing infrastructure which allows them to best address the global marketplace. We have the resources to make the significant investments in technology and infrastructure needed for the most creative and innovative games in the industry. In short, a combination with EA would provide Take-Two’s studios and employees a combination of the right resources for investment and global reach, and the right environment to do their best work.

We believe that Take-Two’s shareholders would not be well-served by any further delay in negotiating and completing the proposed merger. While the videogame industry remains an attractive, high-growth business, the challenges and risks in the business are escalating, and the need for scale is becoming more pronounced. Despite steps taken since March 2007, Take-Two remains dependent on a limited number of titles, and has limited capital resources. In addition, Take-Two faces ongoing financial, legal and operating issues and a very intense competitive environment. Given these factors, we believe it will be increasingly difficult for Take-Two to create sustainable shareholder value and that Take-Two remains exposed to considerable risk of value loss.

We also believe that any delay in this proposed transaction works against the interest of Take-Two’s shareholders, because:

* There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today. We place significant value on the ability to close the transaction relatively quickly so that EA’s strong publishing and distribution network, including our global packaged goods, online and wireless publishing organizations, can positively impact the catalogue sales of GTA IV and also the launch and sale of titles released later this year. We want to work with you and your team to complete the transaction in time to begin realizing its significant marketplace benefits in advance of this year’s holiday selling season.
* We believe Take-Two’s current share price already reflects investor expectations for a strong release of GTA IV as well as the longer-term issues that Take-Two faces. Once GTA IV ships, Take-Two will again be dependent on less-popular titles and face increasing challenges to compete with larger and better-capitalized competitors.
* With GTA IV shipping on April 29, development on this important title must now be essentially complete. We believe now is the right time to complete a transaction with minimal disruption for Take-Two.

We also believe the transaction we are proposing will create value for EA’s shareholders. In addition to the top-line benefits noted above, we can achieve bottom-line benefits by combining Take-Two’s and EA’s corporate and publishing infrastructures and by optimally supporting Take-Two’s creative teams and intellectual properties in EA’s decentralized label structure.

Considerable thought, time and resources have been put forth in developing this offer, and our Board of Directors unanimously supports it. Our offer is not conditioned on any financing requirement. It is subject to the satisfactory completion of a due diligence review of Take-Two, the negotiation and execution of mutually acceptable definitive transaction agreements, and the satisfaction of customary conditions to be set forth in such agreements. We are prepared to move forward immediately with formal due diligence and the negotiation and execution of a definitive merger agreement and believe that with adequate access to the necessary information and people, we can complete both in approximately two weeks. We believe that our due diligence review can be completed with minimal disruption, requiring only limited access to a small number of senior executives of Take-Two and its legal, accounting and financial advisors. We also have prepared a draft merger agreement that we can forward to you immediately.

Our strong preference is to conduct a private negotiation. If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two’s shareholders.

I am available to meet and discuss any and all aspects of this proposal with you and your Board. Again, we believe this proposal represents a unique opportunity to maximize value for Take-Two’s shareholders, and that the combined enterprise would be extraordinarily well positioned to build value for our respective customers, employees, developers and other business partners. We hope that you and your Board share our enthusiasm, and we look forward to hearing back from you by February 22.


John Riccitiello
Chief Executive Officer

Conference Call

Electronic Arts will host a conference call on Monday, February 25, 2008 at 5:00 am PT (8:00 am ET) to discuss its proposal to acquire Take-Two Interactive and may disclose other material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number: (877) 795-3647, access code 220497, or via webcast at

A dial-in replay of the conference call will be provided shortly after the call ends and remain available until March 3, 2008 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available shortly after the call ends at

About Electronic Arts

Electronic Arts Inc. (EA), headquartered in Redwood City, California, is the world’s leading interactive entertainment software company. Founded in 1982, the company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, cellular handsets and the Internet. Electronic Arts markets its products under four brand names: EA SPORTS™, EA™, EA SPORTS BIG™ and POGO™. In fiscal 2007, EA posted revenue of $3.09 billion and had 24 titles that sold more than one million copies. EA’s homepage and online game site is More information about EA’s products and full text of press releases can be found on the Internet at For more information about EA’s proposal to acquire Take-Two, please visit

Additional Information and Where to Find It

This communication is for informational purposes only and does not constitute an offer to buy any securities or a solicitation of any vote or approval or a solicitation of an offer to sell any securities. This material is not a substitute for the proxy statement Take-Two would file with the SEC if an agreement between EA and Take-Two is reached or any other documents which EA may file with the SEC and send to Take-Two stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF TAKE-TWO ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of any documents filed with the SEC through the web site maintained by the SEC at Free copies of any documents filed by EA with the SEC can also be obtained by directing a request to EA, 209 Redwood Shores Parkway, Redwood City, CA 94065, telephone: (650) 628-1500.

EA and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding EA’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended March 31, 2007, which was filed with the SEC on May 30, 2007, its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on June 20, 2007, and Forms 8-K, which were filed with the SEC on June 6, 2007 and July 17, 2007. Other information regarding the participants in a proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in any proxy statement filed in connection with the proposed transaction.

Forward-Looking Statements

Some statements set forth in this press release, including those regarding EA’s proposal to acquire Take-Two and the expected impact of the acquisition on EA’s strategic and operational plans and financial results, contain forward-looking statements that are subject to change. Statements including words such as “anticipate”, “believe”, “estimate” or “expect” and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Some of the factors which could cause results to differ materially from the expectations expressed in these forward-looking statements include the following: the possibility that EA’s proposal to acquire Take-Two will be rejected by Take-Two’s board of directors or shareholders; the possibility that, even if EA’s proposal is accepted, the transaction will not close or that the closing may be delayed; the effect of the announcement of the proposal on EA’s and Take-Two’s strategic relationships, operating results and business generally, including the ability to retain key employees; EA’s ability to successfully integrate Take-Two’s operations and employees; general economic conditions; and other factors described in EA’s SEC filings (including EA’s Annual Report on Form 10-K for the year ended March 31, 2007 and Quarterly Report on Form 10-Q for the quarter ended December 31, 2007). If any of these risks or uncertainties materializes, the proposal may not be accepted, the acquisition may not be consummated, the potential benefits of the acquisition may not be realized, EA’s and/or Take-Two’s operating results and financial performance could suffer, and actual results could differ materially from the expectations described in these forward-looking statements. All information in this press release is as of February 24, 2008. EA undertakes no duty to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.


Electronic Arts Inc.
Tricia Gugler, 650-628-7327
Director, Investor Relations
Jeff Brown, 650-628-7922
Vice President Corporate Communications

Source: Electronic Arts Inc.

Did You Enjoy this Post? Subscribe to 1P Start. It's Free!

One Response to “EA Wants Take-Two for $2 Billion”

  1. 1P Start » Blog Archive » Phil Harrison Quits Sony Says:

    […] away from the complete randomness that was EA’s offer to take Take-Two for two (billion dollars), a new news story has broken in the form of a press release which […]

Leave a Reply

Comment moderation is enabled. Your comment may take some time to appear.

About 1P Start is your ultimate resource in knowing all things gaming. Whatever your choice in console, we're sure to cover it. Along with exciting contests, reviews, previews, trailers and screenshots, 1P Start has got it all! So make sure to hit 1P Start!

1P Start Author(s)
    » PacoDG
    » Dave-Parrack
    » Paul

Blogging Flair

Join Now Tell Em 1PStart Sent Ya Join Now Tell Em 1PStart Sent Ya

eXTReMe Tracker

Gaming Channel Posts

  • 5 Reasons Why I'm Not Playing Grand Theft Auto IV
    While everyone in the world is either waiting in breathless anticipation to get their hands on a copy of GTA IV or already in their non-stop GTA IV sessions, I'm one of the few people that doesn't [...]
  • Wonderland Amusement Park
    If you are a big fan of the games for the Wii that are collections of mini-games, then Majesco is working on a title that is right up your gaming alley. It's called Wonderworld Amusement [...]
  • Rock Band DLC Update: Week of 04-29-08
    This week's Rock Band DLC brings us more Smashing Pumpkins and a couple of songs from the Mother Hips. All three songs are master recordings and are not available at a discounted three pack. The [...]
  • New VC game
    So, with the release of Mario Kart, why even bother putting anything new out for the Virtual Console? That could be the attitude of Nintendo as there is only one new Virtual Console game this [...]
  • New Ghostbusters Screens
    Who doesn't like Ghostbusters? Okay, Ghostbusters II kind of sucked but the original is a sci-fi comedy classic without equal. I've got some high hopes for Sierra and Terminal Reality's Ghostbusters [...]
  • Could Playing The Wii Compare To Real Exercise?
    There is a big debate currently raging over whether Wii Fit, the fitness simulator and computerised exercise trainer already out for the Wii in Japan and Europe, and due out in the U.S. soon, [...]
  • Taking a Look at Old School Iron Man Games
    Over on 1up a couple of guys with one of the coolest jobs in the world (one of them is in charge of overseeing interactive game content done with Marvel's characters) have a blog where they [...]
  • Guitar Hero to Become Rock Band?
    I had a feeling this would happen. What do you do when you have a kick ass game featuring guitars and some other company makes a game that's as great as yours, but adds more instruments? Add more [...]
  • It's almost here
    Mario Kart Wii is almost available to buy. Tomorrow it will be released. Too bad I'm flat broke. Guess I will have to enjoy the VC Mario Kart 64 for a few more weeks until I have I can get the [...]
  • Grand Theft Auto IV Causes Outrage Before Release
    Grand Theft Auto IV is still three days away from release, and the vast majority of people won't have yet had the chance to sample the game. But that doesn't seem to be stopping no-nothing [...]

Hot Off The Press

  • Home again!
    Yesterday was so busy and last night so fatigued that I completely forgot to blog. Sorry about that! I blame first week of term, but the real problem lay with me coming back in the afternoon to [...]
  • Self-Publishing on Your Terms with Wordclay
    Ever since Darren Rowse from ProBlogger published his first book, many bloggers have been wondering, can they get published too? Bloggers have a lot to say and if you never thought about [...]
  • VIPs Weigh in on Miley Cyrus's Vanity Fair Shoot
    The Miley saga continues. Post-controversy measures are flying fast around anyone and everyone involved in Miley Cyrus photo scandal du jour. Photographer Annie Leibovitz is, obviously, still [...]
  • Call for Unpublished Writers
    CALLING WRITERS AS YET UNPUBLISHED In the Footsteps of Gilgamesh (Edited by Mark S. Deniz) 1st April 2009 Gilgamesh Press will publish their first anthology, In the Footsteps of Gilgamesh. [...]
  • Thrifty Homes
    It's back to the future all over again for the environmental movement. Maybe those Bronze Age architects with their homes of straw and sod had the right idea after all. Indeed modern builders have [...]
  • Restaurant Review: The Steeping Room
    The Steeping Room @ The Domain 11410 Century Oaks Terrace - map Austin, TX 78758 512-97STEEP (512-977-8337) [email protected] I'd been meaning to try The Steeping Room for a couple of [...]
  • Recap: SN1-01, "Pilot"
    We're taking a second look at "Pilot," the very first episode of Sports Night. Following up on the review, here’s a recap of the episode. Still to come: memorable lines from the episode, and five [...]
  • Benji Madden offers a song for Paris Hilton… Awww…
    Paris Hilton and Benji Madden at T-Mobile Sidekick Coachella afterparty It sure seems to be getting serious between our dear heiress, Paris Hilton and her beau for two months, Good Charlotte [...]
  • "Double Negative": Memorable lines
    As a follow-up to yesterday's recap, here are some memorable lines from the episode "Double Negative." Did I miss one of your favorites? Share it in the comments. Kevin: This is what you want, [...]
  • Paris Hilton does a little…errr… too much self promotion
    Photo courtesy by I’ve actually been long raving about how I would love to have Paris’s cutie T-shirts with her name printed on. And yes, that is despite the fact that I am no [...]