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' 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."
(Credit:
Simon & Schuster)
Two Harvard researchers have concluded that there's no data to support the notion that violent video games cause the kids who play them to act out violence in real life, contrary to the vast majority of media outlets that would have the public thinking otherwise. The $1.5 million study, which began in 2004, closely examined 1,200 children after bouts with violent games like Grand Theft Auto and not-so-violent titles like The Sims.
Psychologists Lawrence Kutner and Cheryl Olson found that for most kids, playing these games was nothing more than a stress reliever. Sure, some children displayed a playful aggressiveness after hours spent with a violent game, but this was no different than what children experience after seeing a martial arts action movie.
Some researchers, including the Harvard psychologists, even suggest that video games have a positive effect on the brain. Steven Johnson explores this concept in his book Everything Bad is Good for You: How Today's Popular Culture is Actually Making Us Smarter.
Kutner and Olson have documented their findings in Grand Theft Childhood: The Surprising Truth About Violent Video Games, where they stress the importance of parental education and awareness. In a society where children who don't play games are considered to be socially inept, it is important for parents to understand what their kids are playing. In addition, they need to be able to block out the seemingly endless attacks on the video game industry and use the scientific evidence available to make judgments for themselves and their family.
(Source: TG Daily)
Editor's note: Updated at 11:35 a.m. PST to include additional information from Matheson's office about the bill.
A new congressional proposal seeks to make it harder for kids to buy or rent games like the runaway sales hit "Grand Theft Auto IV" (scene pictured here), which bears a "Mature" rating, meaning it's considered unsuitable for kids younger than 17.
(Credit: Rockstar Games)A new bill in the U.S. Congress would force retailers to card kids attempting to buy video games bearing "mature" or "adults only" ratings.
In addition to the identification-checking requirement, Reps. Jim Matheson (D-Utah) and Lee Terry (R-Neb.)'s Video Game Ratings Enforcement Act, introduced on Wednesday, would also require stores to post explanations of what the ratings, devised by the industry-backed Entertainment Software Ratings Board (ESRB), actually mean, according to a press release. A copy of the bill's text was not immediately available on Thursday.
Rep. Jim Matheson
(Credit: U.S. Congress)"As a parent, I know that I'm the first line of defense against my kids playing Mature-rated video games," Matheson said in a statement. "But parents can't be everywhere monitoring everything and some reasonable, common sense rules ought to be in place to back parents up."
For the record, games with an M-rating, by the ESRB's description, are considered suitable for people age 17 and older and "may contain intense violence, blood and gore, sexual content and/or strong language." Those with an AO or Adults Only rating "may include prolonged scenes of intense violence and/or graphic sexual content and nudity" and are recommended only for people age 18 or older.
Whether the new rules are necessary may be up for debate. Some stores already attempt to verify the age of game purchasers. Wal-Mart, for example,
And interestingly, just after the bill was introduced, the Federal Trade Commission on Thursday released the results of a new "undercover" shopper study, which found the number of incidents of stores selling M-rated video games to teens has plummeted since 2000.
On average, only 20 percent of the 13-to-16-year-old shoppers were able to purchase the games from stores like Game Stop/EB Games, Wal-Mart, Target, Best Buy, and Toys R Us, down from an average of 42 percent in 2006 and 85 percent in 2000. (Some stores recorded a far lower percentage--only 6 percent of those shoppers were successful in purchasing M-rated games from Game Stop, for instance.)
The Parents Television Council, a group whose mission is to shield children from sex, violence and profanity in television and other media, applauded the bill's introduction, pointing to its concerns about the Mature-rated Grand Theft Auto IV, which has already broken sales records within the first week of its release.
"Video game ratings supposedly exist to protect children from material that is created for adults, but there is no consequence for irresponsible retailers who repeatedly sell these games to children," PTC president Tim Winter said in a statement. "The importance of this issue cannot be overstated when considering the array of games that include content too deplorable and disgusting to describe in detail."
Previous legislative attempts to limit childrens' access to violent or sexually-themed video games, however, have not met with much success in the courts. Earlier this year, a federal appeals court upheld a lower court's decision to block a Minnesota law that would have imposed up to a $25 fine on minors younger than 17 caught buying or renting video games rated "M" for mature or "AO" for adults-only, citing, among other things, First Amendment concerns. Similar rulings have come down in other federal courts with regard to laws in Louisiana, Michigan, and California.
The Entertainment Software Association, which represents the video game industry, said it shares the politicians' goal of ensuring children have parental approval before playing certain titles but disagreed with their proposed method of doing so.
"Empowering parents, not enacting unconstitutional legislation, is the best way to control the games children play," said ESA President Michael Gallagher.
A Matheson aide told CNET News.com that her boss believes his bill is crafted narrowly enough to survive any constitutional challenge that may arise.
The new bill joins a handful of other proposals related to video games that have surfaced in this session of Congress, including new attempts to outlaw "deceptive" video game ratings. That legislation was a reaction primarily to the "Hot Coffee" scandal a few years ago, in which a readily downloadable modification to the best-selling game Grand Theft Auto: San Andreas could unlock sexually explicit scenes.
The fourth edition of Take-Two's franchise video game Grand Theft Auto had a killer first week at retail, beating out even Halo 3. For a gallery about the game, click on the image above.
(Credit: Take-Two Interactive Software)First-week sales of the video game Grand Theft Auto IV made a killing, knocking off records and blowing away analyst expectations.
Take-Two Interactive Software, the game's publisher, sold 6 million copies and raked in $500 million in its first seven days on the streets, the company announced Wednesday. The game sold 3.6 million copies its first day on the market.
Analysts had expected GTA IV, which has been criticized as excessively violent, to sell 5 million copies during its first two weeks and 9 million copies total. GTA IV's first-week sales beat the previous record held by last year's release of Halo 3, which earned $300 million its first week on the market.
Shares of Take-Two have been trading higher, thanks to the excitement surrounding the game's release. On Tuesday, Take-Two's shares closed at $26.35, up 29 cents. The first-week sales success gives a boost to the game publisher, targeted for a hostile takeover by Electronic Arts in March. Take-Two rejected that offer, calling it "inadequate."
The publisher of the Grand Theft Auto video game franchise feels like it got ripped off in Chicago--and it's suing.
Take-Two wants ads for "Grand Theft Auto IV" replaced on CTA buses and display spaces.
(Credit: Rockstar Games)Take-Two Interactive Software sued the Chicago Transit Authority on Monday for allegedly pulling its ads promoting the latest version of the action-driving and crime game just days after the ads began appearing, thus violating its free-speech and contractual rights, according to a Reuters report.
The suit, which was filed in Manhattan federal court, seeks reinstatement of the ads on buses and display spaces, as well as monetary damages of at least $300,000, the reported value of the contract, according to the report.
The suit claims that ads for the game, which has been criticized as excessively violent, were removed after a television news report questioned why the advertisements were allowed to run following a crime wave in the city, according to the report.
This is not the first time the CTA has come under fire for GTA ads. In 2004, Illinois Gov. Rod Blagojevich criticized the transit authority for agreeing to run ads for Grand Theft Auto: San Andreas, leading the CTA to remove the ads, according to a report in the Chicago Tribune.
Take-Two hasn't yet released the game's first-week sales figures, but analysts are expecting sales to top last year's record $300 million first-week sales of Halo 3. The game is expected to sell more than 9 million copies.
Shares of game publisher Take-Two were up Monday on the heels of positive reviews of the forthcoming video game Grand Theft Auto IV, which is being released to the public at midnight Tuesday.
Take-Two plans to launch "Grand Theft Auto IV" on Tuesday.
(Credit: Rockstar Games)Shares of the game publisher traded as high as $27.10, 3.4 percent higher than Friday's closing price. That trading price is also a good dollar a share above the offer made by Electronic Arts when it launched its hostile bid for Take-Two last month. Take-Two rejected that offer, calling it "inadequate." Take-Two owns GTA creator Rockstar.
The excitement surrounding the release has hit a fever pitch, fueled by the positive reviews. The New York Times called the game "violent, intelligent, profane, endearing, obnoxious, sly, richly textured, and thoroughly compelling work of cultural satire disguised as fun." My CNET colleague Dan Ackerman got his hands on the final shipping version and offered initial thoughts on the game's pluses and minuses in his blog.
Analysts are expecting the action-driving video game to sell more than 9 million copies and top last year's record $300 million first-week sales of Halo 3.
Check back Tuesday morning when my colleague Daniel Terdiman delves deeper into the controversy surrounding the popular video game franchise.
Why didn't anybody think of this before? Grand Theft Auto franchise developer Rockstar Games has teamed up with Amazon.com in an interesting joint promotion.
May we suggest Texas apocalyptic-guitar instrumental band Explosions In The Sky for this scene?
(Credit: Rockstar Games)When GTA IV comes out on April 29 and you are cruising around inside doing whatever evil deeds come to mind, you might like a particular song playing on one of the radio stations in the game. Well, you will be able dial a number on your in-game virtual cellphone and receive a text message with artist and title information. And if you've signed up to be part of Rockstar's upcoming social network, you'll get a real-world e-mail with a link to buy the song on Amazon.com. All songs are DRM-free MP3s, so you can play them on any device, including your Xbox 360 or PlayStation 3--outside the confines of the game.
Rockstar is curating the 150-plus songs bundled with the game, which will include oddities and a few exclusives, including one number from hip-hop artist Nas. Now imagine if Rockstar used the online capabilities of the game consoles to update the in-game radio playlists silently. That's a new form of music distribution that might actually reach younger listeners.
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.
