Electronic Arts announced Tuesday it was extending its tender offer for rival game developer Take-Two Interactive Software to July 18, marking its third extension since launching its hostile bid in March.
EA, which is currently offering Take-Two investors $25.74 a share, said nearly 6.14 million shares have been tendered in, representing approximately 8 percent of Take-Two's shares.
In early morning trading, Take-Two's stock hovered at $26.35 per share.
EA's previous deadline for its tender offer was June 16, which came roughly a week after Take-Two reported better than expected quarterly earnings, thanks to its record-breaking launch of Grand Theft Auto IV.
"We congratulate Rockstar on the successful launch of GTA IV but believe our offer reflects a full and fair price based on the long-term value of Take-Two's entire operation," Owen Mahoney, EA senior vice president of corporate development, said in a statement.
Mahoney said its offer price is a "substantial premium" to where Take-Two's stock traded at prior to its offer. Prior to going hostile with a tender offer directly to investors, EA had given Take-Two a bear hug by publicly announcing its unsolicited offer in February. Take-Two had closed at $17.36 a share, prior to EA's public announcement of its unsolicited bid.
EA, should it keep its tender offer alive, may have to add another extension beyond its July 18 deadline. That's because it's working on supplying the FTC with its requested information, at which point the FTC will then have 45 days to review it. If the FTC takes all 45 days, that would surpass EA's new extension deadline which is now set to expire in 32 days.
Video game maker Take-Two Interactive Software announced better-than-expected earnings on Thursday thanks to recording-setting sales of Grand Theft Auto IV.
For the second quarter ended April 30, net profit was $98.2 million, or $1.29 cents per share, compared with a net loss of $51.3 million, or 71 cents per share, in the second quarter of fiscal 2007. Sales were up more than 160 percent to $539.8 million for the period, blowing away analyst estimates of $499.1 million.
The company also raised its forecast for the remainder of the fiscal year.
Take-Two said it expects to earn 45 cents to 55 cents per share, excluding special items, on revenue of between $325 million and $375 million in its current, third fiscal quarter.
In May, Take-Two announced that the new game had raked in all-time records of $310 million on its launch day of April 29 and $500 million during its first week. The single-day figure shattered the previous record, set last September by Halo 3, of $170 million.
The company, which has rejected a $2 billion buyout offer from rival game maker Electronic Arts, is also having " formal discussions" with other parties about strategic alternatives, Chief Executive Ben Feder told Reuters.
"The board remains committed to exploring strategic alternatives and we're actively engaged in that process now," Feder said. "We have had and are having formal discussions with a number of interested parties."
EA, which offered $25.74 a share for Take-Two in April, is undaunted in its takeover bid. The company recently announced another extension of its merger offer.
Shares of Take-Two were up 34 cents, or 1.2 percent, to $27.65 in after-hours trading.
Electronic Arts announced Monday that it is extending its tender offer for Take-Two Interactive Software to mid-June, marking its third extension in its hostile buyout attempt of its rival game maker.
Shortly after EA failed to make an attractive-enough offer, Take-Two's Grand Theft Auto IV shattered all-time launch sales records, lending support to Chairman Zelnick's argument that the bid undervalued the company.
(Credit: Rockstar Games)EA, which, to date, has received commitments from Take-Two investors to tender roughly 6.2 million shares, or 8 percent of the company, has extended its deadline to June 16. Previously, the deadline was set for May 16.
Taking a jab at its rival, Take-Two Chairman Strauss Zelnick issued a statement: "This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our board of directors thoroughly reviewed, and unanimously determined to be inadequate and contrary to the best interests of Take-Two's stockholders."
He further noted that Take-Two, in an effort to maximize shareholder value, has begun exploring strategic alternatives with interested parties, now that its record-breaking launch of Grand Theft Auto IV has wrapped up.
EA, which launched its hostile bid valued at $2 billion for Take-Two in late February, said despite the extension, its current offer remains the same.
"EA's offer price remains unchanged at $25.74 per share, and our offer is still subject to conditions that include regulatory approval. As stated earlier, we retain the right to terminate the offer, if the conditions are not satisfied," Owen Mahoney, senior vice president of EA corporate development, said in a statement.
Take-Two shares traded down 1.14 percent in Monday morning trading to $26.79 a share.
Electronic Arts' hostile bid for Grand Theft Auto producer Take-Two Interactive appears to have ended quietly this week.
Shortly after EA failed to make an attractive-enough offer, Take-Two's Grand Theft Auto IV shattered all-time launch sales records, lending support to Chairman Zelnick's argument that the bid undervalued the company.
(Credit: Rockstar Games)The game maker, whose reduced acquisition bid of $25.74 a share was rejected as inadequate last month, had set Friday as the extended deadline for it to buy up Take-Two's shares. The day came and went without action regarding the takeover from either company.
The updated offer, rejected by Take-Two on April 18, continued to be inadequate and undesirable, according to Chairman Strauss Zelnick at the time. "It undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74."
Since then, the record-breaking launch of Grand Theft Auto IV has likely proven Zelnick correct, with first-week sales of $500 million. The game sold 3.6 million copies its first day on the market, shattering the previous all-time launch sales record held by Microsoft's Halo 3.
Take-Two shares were priced slightly above $27 in after-hours trading Saturday morning.
"There is nothing going on right now," Take-Two spokeswoman Meg Maise told AFP on Friday afternoon. "It is in (EA's) court."
It looks like EA has made a turn-around in response to fan outrage at its plans for a complicated DRM scheme in two high-profile PC games due out later this year.
Word came out yesterday that Spore (from Sims-meister Will Wright) and the PC version of Xbox 360 hit Mass Effect would implement a new version of the Securom DRM middleware, which not only requires you to keep a game's DVD in the drive to play it, but would need to perform an authenticity check every 10 days, which would have required your computer to be online during that time.
Electronic Arts has high expectations for its forthcoming, PC-only Spore from Sims creator Will Wright. Irritating DRM won't help.
(Credit: CNET)Amid much fan outrage and negative publicity, it appears EA and each game's respective developer has relented and will instead implement a more benign DRM strategy. Gamer's Hell reported that Mass Effect will now require a one-time online authentication, and it will reauthenticate each time you connect to the game's download servers, but that it will no longer require constant reauthentication. Kotaku reported the same decision has been made for Spore.
On the Mass Effect user forum, the community manager from developer BioWare cited its its "many friends in the armed services and internationally who expressed concerns that they would not be able reauthenticate as often as required," as one of the reasons for the change. Considering that the forum topic in which Bioware announced its original plan generated 115 pages of comments, it's probably fair to say that fan opinion had something to do with it as well.
Copy protection remains a huge issue for PC game developers and publishers. Just a few weeks ago, Cevat Yerli, the president of Crysis developer CryTek told Hungary's PC Play that his company was abandoning PC exclusives because of rampant piracy. We certainly understand that issue, but clunky DRM is not the answer if publishers want to encourage PC gamers to buy their products.
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When designing characters for Spore, players will have a wide selection of body parts to choose from.
(Credit: Electronic Arts/Maxis)
Attention gamers: If you're looking forward to the taking a hands-on role with the forthcoming Spore, you've got work to do starting June 17.
That's when Electronic Arts and Maxis plan to release the Spore Creature Creator, in both a free, downloadable demo version and a $9.99 retail version (or 9.99 euros, for buyers in much of Europe). The demo version will be available from Spore.com and also will be included with The SimCity, due to be released June 23.
The retail edition provides access to all the creature-making parts for Spore, while the demo version is limited to 25 percent of those parts. Gamers will be able to share their creations with friends, via routes including uploads to YouTube.
In Spore, a long-awaited game from Sims creator Wil Wright, gamers will get a taste of evolution, taking their characters from primordial existence to civilization. (Wright has set a high standard for success--The Sims recently logged its 100 millionth sale.) Besides the individual characters, Spore-ophiles will be able to establish tribes and conjure up buildings and vehicles, including UFOs.
The hands-on work of shaping and painting fantastical critters with Creature Creator won't be just a preliminary exercise, to be abandoned when Spore arrives in September. Gamers will be able to import their creations into the retail version of the game.
Spore for the PC and the Mac is set to debut September 5 in Europe and then two days later in North America, and a version for the Nintendo DS is also due at that time. A version for the Nintendo Wii will come sometime later--it's still in the "early prototyping phase," according to the Spore FAQ.
For more preview images of Spore, see this CNET News.com gallery: Images: Conjuring creatures in EA's 'Spore.'"
To the surprise of probably no one, Take-Two Interactive Software has rejected Electronic Arts' hostile buyout offer.
In an announcement Wednesday morning, Take-Two said its board of directors and company officers have recommended that shareholders reject EA's bid of $26 a share. The board also said it's developing alternative strategies for possible alliances with third parties, including EA, that would kick in after the April 29 of release of Grand Theft Auto IV.
Take-Two's board noted that "substantive discussions" about possible alliances have yet to occur, although it did emphasize that the company is now open to them. In its statement, the company said it "unanimously determined that the $26-per-share cash offer is inadequate in multiple respects and contrary to the best interests of Take-Two's stockholders."
Among the issues cited by the board:
• EA's offer undervalues Take-Two, especially in light of its 2007 initiative aimed at streamlining operations and cutting costs.
• Take Two's financial advisers, Bear Stearns and Lehman Brothers, objected to the financial terms of the offer, which, Take-Two separately noted, would be taxable for shareholders.
• The timing of EA's unsolicited offer is "opportunistic" in that it is intended to capitalize on the upcoming release of Grand Theft Auto IV, the newest installment in Take-Two's successful video game series.
• EA's offer does not reflect the potential "synergy value" that a combination of the two companies would create, including a larger distribution network, more opportunities to exploit "online, wireless, and other evolving platforms," and reduced administrative costs.
No comment yet from EA.
The drama surrounding Electronic Arts' attempt to buy Take-Two Interactive is, increasingly, playing out like a combination action-adventure and shooter game.
As noted in a story published Friday in The New York Times, Take-Two has become a moving target not only because of maneuvering by the company's officers but because of changes in its shareholder group.
The offer EA presented on Thursday directly to Take-Two shareholders--$26 per share, or about $2 billion--is essentially the same one it offered the video game publisher in February. But as the Times story points out, Take-Two's shareholder population has in the past month changed to include many short-term stakeholders who bought its stock with the intention of turning a quick profit should the deal go through and who, perhaps, will try to force EA to increase its offer. Take-Two shares were trading at $25.10 as of early Friday.
Take-Two said its directors will consider the offer over a 10-day period, but also said it won't negotiate the offer until after the release of Grand Theft Auto IV, on April 29. EA's chief executive, John Riccitiello, says it isn't practical to wait until the end of next month because EA needs all the time it can get to absorb Take-Two and make use of its assets in advance of the holiday season.
Hmm...maybe this falls into the massively multiplayer genre.
A shareholder of Take-Two Interactive Software has sued the company for rejecting Electronic Arts' $2 billion takeover bid, The Wall Street Journal reported Monday (subscription required to read entire article).
The suit was filed Friday in a Wilmington, Del., court. According to the Journal, the suit charges that Take-Two executives sought to enrich themselves at the expense of shareholders through a compensation agreement, amended in February after EA made a private offer for the company, that could grant them a big pay-out if Take-Two is acquired.
Two law firms--Prickett, Jones & Elliott, and Schiffrin, Barroway, Topaz & Kessler--filed the suit, which names Take-Two Chairman Strauss Zelnick and CEO Benjamin Feder as defendants.
Morgan Stanley is the banker representing Electronic Arts in its unsolicited buyout bid for rival game publisher Take-Two, the investment bank confirmed Monday.
While that news alone is no big deal, consider this: Morgan Stanley is also representing Microsoft in its unsolicited buyout offer for Yahoo, which was announced a mere 25 days ago.
That's two megabillion-dollar buyout bids the premier investment banking firm has agreed to handle in the past month. And both have the potential to get mean and nasty, should the target companies kick and scream all the way to the altar.
So, this raises the question regarding Morgan Stanley, lofty fees aside:
Is Morgan a glutton for punishment?
