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EA Desperately Wants to Get Into Take-Two's Pants

SATURDAY MARCH 8 2008 10:57 AM

Submitted by we3_pirate. Edited By Zoetica.

TAGS: EA, Take-Two, Grand Theft Auto, merger

Hot on the heels of another big takeover in the news, Electronic Arts (EA), the makers of the "Madden NFL" and "The Sims" video games, has made a bid for Take-Two Interactive, the company that owns "Grand Theft Auto" makers Rockstar Games. The current offer is for $26 a share, but Take-Two is playing hard to get.

In a letter to Take-Two Chairman Strauss Zelnick, Electronic Arts CEO John Riccitiello urged the company, which is known for its Grand Theft Auto video-games, to accept the offer.
But on Sunday Take-Two also said in a statement that its board of directors has rejected the offer which it said "substantially undervalues Take-Two's robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty."

Despite this "talk to the hand" treatment from Take-Two, EA seems to think that “no” means “yes.”

However, Riccitiello warned Take-Two in his letter that rejecting the proposed deal would not be in the interest of Take-Two's shareholders. He said EA was raising its offer "to further demonstrate our seriousness and encourage you to move forward now."

Translation: “Come on, baby, I’ll show you a real good time.”

Many have speculated that the upcoming release of “Grand Theft Auto IV” is the driving force behind Electronic Arts’ aggressive attempts at a merger, not the least of which is Take-Two itself, which released a statement saying

"[EA’s bid] is highly opportunistic and it's attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry."

And while that may be one of the contributing factors, I think it goes a bit deeper than that. After all, Take-Two owns not only Rockstar Games, but also 2K Games, who have made a little game, that you might have heard of, called “BioShock”. 2K also has a subsidiary dedicated to sports titles, 2K Sports, which has been a consistent rival to EA’s stable of sports titles for years. So, with two of the most critically and commercially successful games ever made and a chief rival in one tidy package, no wonder EA is on the prowl.

"Our strong preference is to conduct a private negotiation," he wrote. "If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two's shareholders."

Pretty tough talk, considering there is also speculation that

[EA] will likely face more competitive pressure with the pending merger between Activision Inc. and Vivendi Games.

Hmm, Electronic Arts’ offer and it’s “compelling value” are starting to smell a little like desperation.

we3_pirate is practising a new dance he just created. It's called the "Corporate Merger."

15 Comments

pomfelo

San Antonio, TX

February 2004

MAR 08, 2008 11:09 AM

Didn't I read somewhere the Take Two senior stockholders getting a multimillion dollar stock dividend (?) soon? That couldn't affect the speed at which EA is moving, could it?

pomfelo

San Antonio, TX

February 2004

MAR 08, 2008 12:56 PM

I remember now. Multi-million dollar bonuses for the VP's/CEO. Not shady at all.

coyotemike

USA

May 2006

MAR 08, 2008 01:03 PM

I am not geek enough for this thread. *goes and plays "pong"*

we3_pirate

I'm lost

July 2007

MAR 08, 2008 01:56 PM

pomfelo said:
I remember now. Multi-million dollar bonuses for the VP's/CEO. Not shady at all.

Hmm, I didn't see anything about that, but that might also have something to do with EA's aggressiveness.

I'd like to see the article you read.

pomfelo

San Antonio, TX

February 2004

MAR 08, 2008 02:15 PM

we3_pirate said:

pomfelo said:
I remember now. Multi-million dollar bonuses for the VP's/CEO. Not shady at all.

Hmm, I didn't see anything about that, but that might also have something to do with EA's aggressiveness.

I'd like to see the article you read.

Ah! Found it! Take Two Raises Eyebrows

It's not exactly how I remembered it. Take Two enacted golden parachutes to the tune of $2 Billion Dollars after EA made their bid. Still shady, but more so on T2's side.

OTOH, they gave themselves huge pay raises. EA's senior officers could very easily cut themselves a cut of that. The timing could explain the second offer.

we3_pirate

I'm lost

July 2007

MAR 08, 2008 02:23 PM

pomfelo said:

we3_pirate said:

pomfelo said:
I remember now. Multi-million dollar bonuses for the VP's/CEO. Not shady at all.

Hmm, I didn't see anything about that, but that might also have something to do with EA's aggressiveness.

I'd like to see the article you read.

Intriguing, now I shall stroke my chin in an exaggerated manner...

pomfelo

San Antonio, TX

February 2004

MAR 08, 2008 02:42 PM

we3_pirate said:

pomfelo said:

we3_pirate said:

pomfelo said:
I remember now. Multi-million dollar bonuses for the VP's/CEO. Not shady at all.

Hmm, I didn't see anything about that, but that might also have something to do with EA's aggressiveness.

I'd like to see the article you read.

Intriguing, now I shall stroke my chin in an exaggerated manner...

Hmmmmmmmmmm...

SockPuppet

United Kingdom

July 2006

MAR 08, 2008 04:59 PM

coyotemike said:
I am not geek enough for this thread. *goes and plays "pong"*

You're too geek for me, dude. I'm sticking with Patience.

NekoKoneko

Australia

July 2007

MAR 09, 2008 03:32 AM

Take-Two is playing "hard to get" so EA doesn't screw things up by either releasing GTAIV prematurely, or pushing the release date back. Take-Two is thinking about the fans surprisingly.

EA has a habit of releasing games in their beta stages because they're impatient and want the money now now now, rather the producing a game that works...pretty sure no one wants that to happen to GTAIV.

DrKoruaMang

San Diego, CA

July 2007

MAR 09, 2008 04:15 PM

I hope Take Two stays seperat. I like Take Two. NHL 2k is awesome. And I'm pretty sure EA is trying to take over the world.

malkav11

Saint Paul, MN

July 2003

MAR 09, 2008 04:23 PM

I really don't see any world in which EA gobbling up one of their chief rivals is good for gamers. I mean, even if EA were renowned for how good its games were and how well it treated employees, customers, and licenses, which it most certainly is not.

we3_pirate

I'm lost

July 2007

MAR 09, 2008 04:27 PM

malkav11 said:
I really don't see any world in which EA gobbling up one of their chief rivals is good for gamers. I mean, even if EA were renowned for how good its games were and how well it treated employees, customers, and licenses, which it most certainly is not.

What, you don't like "Madden: 107th Version of the Same Game, Now Ten Times Shinier"?

All things considered, I'm hoping Take-Two's execs do the right thing and not give in to EA's offers, no matter how much they try to look like a juicy steak.

malkav11

Saint Paul, MN

July 2003

MAR 09, 2008 05:16 PM

Well, to be honest I'd be perfectly okay with every sports franchise on the market imploding into a single omnititle, so as to take up less shelf-space. But that's because I hate sports.

ASSH0LE

Las Vegas, NV

June 2003

MAR 12, 2008 01:32 AM

Wow, that means GTA 5 should be at least as good as Ultima IX was!

EA could fuck up a wet dream.

we3_pirate

I'm lost

July 2007

MAR 12, 2008 11:18 AM

ASSH0LE said:
Wow, that means GTA 5 should be at least as good as Ultima IX was!

EA could fuck up a wet dream.

Since the people in charge of Take-Two keep rebuffing EA, the only people that are going to be a problem are the shareholders. And since the offer was made public by EA, their stock price dropped 5%, while Take-Two's rose 54%. source

Personally, I don't think there's much to worry about there.