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."
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.
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.
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.
Electronic Arts has amended its takeover offer for smaller video-game publisher Take-Two Interactive.
According to an EA representative and an EA filing Friday with the Securities and Exchange Commission, the offer has been extended to Friday, April 18, instead of Friday, April 11. (EA's own press release incorrectly states that April 18 is a Wednesday. Oops.)
In addition, EA added a new condition to its offer: Take-Two must chuck its "poison pill" shareholder rights plan designed to deter the takeover.
Earlier this week, Take-Two officially rejected EA's bid, adopted the poison pill, and moved its annual shareholder meeting from April 10 to April 17. EA is apparently following suit with its date change.
"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," Owen Mahoney, EA's senior vice president of corporate development, said in Friday's press release. "We continue to believe that our $26 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."
EA's attempt to take over Take-Two has been an ugly one, with back-and-forth press releases doing much of the negotiation.
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.
