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Grand Theft Auto makers, Take Two were just given an offer from Electronic Arts for a purchase of the company. This isn’t just any offer; EA has fronted a $2 billion cash offer. To add to the dramatic effect of such an offer Take Two has emphatically said no. The insanity does not stop there.
The $2 billion dollars represents a sixty-four percent premium over Take Two’s closing price as of February 15. This weekend was a busy one for offers between the two groups. Both parties have already put their cards on the table and things are already getting ugly.
EA CEO John Riccitiello has said that the purchase would benefit Take Two on a more personal level. He argues that ”Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.” However, in a very ominous turn in the letter to Take Two he states that ”There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today.”
The letter goes on to make it clear that one of the deciding factors for the offer is the imminent success of GTA IV. There is also an indication that the purchase would mean some corporate restructuring and EA’s shareholders becoming fat cats. Of course nowhere does the letter outline any benefits exclusive to the Take Two team.
Take Two’s Strauss Zelnick immediately shot back his response to EA by respectfully calling EA’s proposal ”opportunistic” and that it “…substantially undervalues Take-Two’s robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty.” Zelnick goes on to call EA out on their move to benefit from the GTA franchise.
Game Politics released a series of letters today chronicling the courtship between EA’s Riccitiello and Take Two’s Zelnick that has been going on since earlier this month. Thank god that Riccitiello stated in the letter of intent that his“strong preference is to conduct a private negotiation.” It would just make things difficult if the media was all over the transaction… like it is now.
EA hasn't been willing to back down due to the lucrative nature of absorbing Take Two. Despite the initial rejection and confrontational tone from the GTA makers EA is leaving the offer on the table. The question is, how long. Zelnick says until after the launch of GTA IV. But will EA still want them?