Take-Two rebuffs latest offer from EA

After a quiet few weeks, Electronic Arts and its takeover target, Take-Two Interactive Software, are back to sparring.

The latest round between the video game makers got into full swing on Friday morning, with word from EA that it would extend its Friday deadline for buying up all Take-Two shares by a month, to May 16. But even as it gave with one hand, it took away with another: EA said it would trim the per-share offering price to $25.74 from $26, given newly OK'd stock grants to Take-Two's management, ZelnickMedia.

Take-Two plans to launch "Grand Theft Auto IV" later this month.

(Credit: Rockstar Games)

On Thursday, Take-Two shareholders approved a proposal to issue 1.5 million shares of restricted stock to ZelnickMedia.

As of Thursday, just 6.4 million shares of Take-Two had been tendered--that is, about 8 percent of the outstanding shares.

Take-Two, the maker of Grand Theft Auto, responded quickly Friday to EA's deadline extension/price reduction.

"The minuscule number of shares tendered, as well as the strong vote in favor of the proposals presented at our annual meeting, offer indisputable evidence that our stockholders regard our efforts to enhance Take-Two's stockholder value as superior to the EA offer," Strauss Zelnick, chairman of Take-Two, said in a statement.

Zelnick termed Friday's offer as "the same highly conditional proposal" put forth by EA a month ago, which Take-Two rejected.

The new offer continues to be inadequate and undesirable, according to Take-Two. "It undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74," he said in the statement.

EA launched its unsolicited bid, valued at roughly $2 billion, in late February.

In midmorning trading Friday, EA's shares were up $1.08, or 2 percent, to $52.53, while Take-Two's shares were up 30 cents, or just more than 1 percent, to $26.11.