EA Attempts Hostile Takeover of Take-Two

Video game giant has launched a hostile effort to take over game developer Take-Two by force, offering investors $26 per share for their stock.

Giant video game developer and publishers Electronic Arts is serious about wanting to buy controversial game developer Take-Two: it’s going directly to Take-Two’s shareholders and offering them $26 per share in a move calculated to take Take-Two’s management board out of the equation. Unless extended, EA’s offer expires April 11, the day after Take-Two’s anticipated board meeting on April 10.

Electronic Arts announced in late February that it had taken its $26 per share offer to Take-Two’s board, but had been rejected. Take-Two CEO Strauss Zelnick characterized EA’s offer as “the wrong price and the wrong time..”

EA’s $26-per-share offer represents a 64 percent premium over the company’s share price on February 15, the last day of trading before EA’s revised original buyout offer. However, the price represents only a 4 percent premium on Take-Two’s closing price yesterday. In all, EA is willing to pay about $2 billion for Take-Two; the offer is an all-cash deal, with EA not having to make any special arrangements to finance the deal.

“This is a great opportunity for Take-Two shareholders,” said EA CEO John Riccitiello in a statement. “We believe Take-Two investors will see our tender offer as the best way to maximize the value of their investment in Take-Two.”

Take-Two had previously indicated it might be open to talking with EA about a takeover, but wanted to put off any negotiations until the company’s widely-anticipated game title Grand Theft Auto 4 lands at retailers. Earlier this week, two of Take-Two’s largest shareholders— FMR LLC and Oppenheimer Funds—significantly reduced the size of their stakes in the company.