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EA Mods Take-Two Tender Offer

eataketwopuzzle.jpg When Take-Two rejected EA's buyout offer for the umpteenth time earlier this week, they also instituted a shareholder rights plan - a poison pill tactic that would give existing shareholders more room to reject the offer outright or negotiate a higher price - basically making it much more difficult for Electronic Arts to pull off the takeover. EA is not pleased.

"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," said Owen Mahoney, Senior Vice President of Corporate Development at EA. "We continue to believe that our $26.00 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."

In response to Take-Two's actions, which include moving the annual stockholder meeting to April 17th, EA has amended its tender offer, extending the offer from April 11th to April 18th, under condition that T2's board either redeem the stock purchase rights issued with the stockholder rights plan, or they are assured the rights have been invalidated, at least in regards to their takeover bid.

I layman's terms? Take-Two laced their stock with poison. EA modified their offer to eliminate said poison. Take-Two moved their stockholder meeting past the offer deadline, and EA extended the offer deadline to compensate. It's very much like watching a chess game - you care about the outcome, but the match itself is boring and a bit confusing unless you understand exactly how the game works.

EA Amends Take-Two Tender Offer and Extends Expiration Date to April 18, 2008

REDWOOD CITY, Calif.—(BUSINESS WIRE)—Electronic Arts Inc. ("EA") (NASDAQ:ERTS) today announced that it is amending its tender offer for all of the currently outstanding shares of common stock of Take-Two Interactive Software, Inc. ("Take-Two") (NASDAQ:TTWO). The amendments are in light of the actions publicly disclosed by Take-Two on March 26, 2008, including its adoption of a poison pill and change to the date of its 2008 annual meeting of stockholders to April 17.

The principal amendments to the offer include:

* EA has added a condition to its offer requiring either (1) that Take-Two's Board of Directors redeem the preferred stock purchase rights issued as a result of Take-Two's adoption on March 24, 2008 of the stockholder rights plan, or (2) that EA be satisfied that such rights have been invalidated or are otherwise inapplicable to its acquisition of Take-Two.
* EA has extended its tender offer for all of the common stock of Take-Two until 11:59 p.m., New York City time on Wednesday, April 18, 2008, unless further extended. The offer was previously set to expire at midnight, New York City time, on April 11, 2008.

"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," said Owen Mahoney, Senior Vice President of Corporate Development at EA. "We continue to believe that our $26.00 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 commenced on March 13, 2008 its all-cash tender offer to purchase Take-Two shares for $26.00 per share, which represents a 64% premium over Take-Two's closing stock price on February 15, the last trading day before EA sent its revised proposal to Take-Two.

As of 5:00 p.m., New York City time, on Thursday, March 27, 2008, approximately 5,000 shares of Take-Two had been tendered in and not withdrawn from the tender offer.

8:20 AM on Fri Mar 28 2008
By Mike Fahey
4,730 views
120 comments

Comments

  • Why don't they just get a room already...

  • At this point EA is reminding of a spoiled child who isn't getting his candy from the grocery store.

  • Take Two NEEDS to survive this. If only to make the point, that you CAN stand up to EA.

  • why april 18 and not may 1?

    oh, it obviously has NOTHING to do with GTAIV~

  • EA - Worse than Jehovas's Witnesses.

  • @AdeptVoice:

    LOL'd@Komrade_Kayce:

    Yes, please. I really hope they last this out.

  • Wake me when Take-Two gets bought out or after the GTA4 release.

  • to hell with EA and their bullshit offer. GTA4 is going make well over 2 billion all told. EA has some balls. crying because take two won't sell. good for them i says. ea can't do good with their own franchises dont let them destroy more. besides madden sucks and a all EA sports genre is one ill never support.

  • @Striderhayasa - Phillyyakk on PSN and Live.: I wouldn't say crying or whining like a child shows that EA has "balls".

  • @Iron_Dragon_2.0:
    Agreed. It's more like a lack thereof.

  • EA, stop trying to take over the world. Please..

  • I think it goes without saying that no one on Kotaku supports money grubbing EA. What id like to know is, why must they work so hard envelop the entire gaming industry under its crap umbrella when its obvious that almost everything thats been branded with the EA logo has been utter crap.

    I find it amazing that EA still has money to throw around with so many failed hype games.

  • Well @Iron_Dragon_2.0: It's a good thing EA's not actually doing this.

  • Either they're not gonna get bought out, or EA is gonna lose a lot of money when they do get them.
    That Poison Pill plan is genius

  • "The Emperor is most displeased..."

  • If EA still continues even harder to acquire TT after GTAIV, I might give EA a nudge or two.

    I say this hiatus will die, as mandatory, on the 18th and start up again when Bioshock II is near completion.

  • @AdeptVoice: ouch, that offended me.

  • Fucking EA, if they don't want you, why don't you buzz off. I mean it can't be a fair price if you wanted so badly and T2 doesn't want to sell. Why don't EA offer them way more money or shut the hell up already.

  • Stay Strong Take-Two... $10 per share isn't worth your integrity and your soul! EA You suck... get out of the buissness

  • @ Iron_Dragon_2.0: yeah but look at EAs attitude. they believe that TT should be grateful to sell on the eve of one of the biggest releases this year and to effectively neutralise the only sports developer than can stand against EA has done so for years. EA might have the nfl, but TT/Visual Concepts have MLB and the best NBA games. i hope this deal never happens or even better... don't sell to EA, sell to Sony. that way visual concepts can make nfl games as a first party developer.

  • I wonder how much the guns in GTA V will cost?

    Totally off topic: Is anyone else using Firefox for Mac? I can't post using that browser anymore, it just started today. The comment preview doesn't show up when I'm typing, and when I click the submit it just says "Failed to post comment. Please try again later ()." I DO have the preview comment box clicked, and it shows "by NateN at Date Time", just nothing shows up when I type. Kinda funky! (I posted this using Safari.)

  • Dear EA,
    Although you have some good games out, and of course you have some intriguing titles coming out in the future (Dead Space), you tend to poison what you touch. I merely have to point out your continually rehashed Madden series, which, usually feels like a recycled version of the last iteration. Also, your movie games suck. Ass. Horribly too, not like a hooker that's skilled in that area. Anyway, please don't ruin one of my favorite games. Please.

    -Raziel


  • Good Plan Take Two hold them out with a sticking going na na na na naaaaa you can't touch me. lol Stay alive Take Two Stay Aliveeee

  • wow...i didnt think Kotaku was so completely full of people on Take 2's jock strap...the offer is fair, and will continue to be fair even after GTA comes out...thats the reason each piece of stock is being offered to buy at 10$ more then its worth...without this bid take 2 stock would still be at $15-$17 a share and dropping...T2 has been losing money off there stock prices every quarter for quite a while...I honestly think that it would be a good thing for them to get taken over, both for there IP's and EA's...and for all of you talking crap about EA i want you all to honestly tell me you havent bought an EA game recently...anyone...thats what i thought. If EA sucked so bad COD4 wouldnt have sold so big, Rock Band wouldnt have sold so big, and there are many more examples, i mean come on people...one thread your sucking off Rock Band and the next you talk about the company that made said game and say they make all horrible games, choose a side.

  • @Rastaman4200: i'll give you rockband but they only just produced that one harmonix was in the game way long before then give EA time to make shitty sequels but CoD4 is Activision there buddy. Reason we don't want EA to buy them out cause then it would mean all sport Games would be EA only other than a few small ones here and there.

  • @Striderhayasa - Phillyyakk on PSN and Live.: That's not really what they think. Every offer like this is phrased in those terms. You wouldn't say, "listen, you and I both know that 26 is probably a little low and that we're orchestrating this to sway your sharholders;" instead you say "I have this awesome offer for you." You try and argue your point and sell the benefit of the purchase. To do otherwise would be foolish.

  • @Rastaman4200: Let's not forget that Blizzard sort of went through the same thing with World of Warcraft when all their resources were tied up in that game making it a make or break affair. If WoW didn't sell then Blizzard would have went under. Blizzard now swims in money. I think it's fair to make the same comparisons to Take-Two.

  • @Rastaman4200: EA makes Battlefield: Bad Company, not COD4. Which, based on the beta, has no hope of being real competition.

  • @Raziel3333: was confused on COD4 sorry...but my point still stands...hell EA has a tie in with The Orange Box...and i dare any of you to talk crap on that one...and i do understand the whole sports thing...but if they bring the MLB liscence and a couple games over to EA and use EA's development tools and such to make those games even better i wouldnt see an issue besides it not having the same name.

  • Why wont EA just give up. Please, EA-Mr-Terrible-Dev/Publisher, leave 2k-Mr-Good-Dev/Publisher alone. This whole ordeal is making me sad. Why must EA be such money-hungry sons of bitches. Why not concentrate on making their shitty sports games better? Or coming up with some new shit?

  • @Striderhayasa - Phillyyakk on PSN and Live.: Unfortunately, unlike 2K's MLB deal, EA's NFL exclusivity license unfortunately doesn't have that same provision regarding first party titles.

  • @Rastaman4200:
    COD4 is Activision and Rock Band is only a distribution deal. Now your argument has no leg to stand on.


  • In my opinion, EA has the best sports roster...period. Madden is a big seller every year and no matter what anyone says, it's the most solid football game ever. Play madden 08, then switch to Allpro 2k8. See what I mean? It's not just the lack of stars in 2K8, it's just not as solid as Madden.
    People love to hate the successful.
    Question: What was the best skateboarding game last year? Was it Tony Hawk, the guy who's held the skateboard crown for the past ten years? Or was it Skate, the new comer with it's first entry into the skateboarding genre?
    Skate was, in my mind, was one of the most challenging yet fun games of last year.
    People hate EA for making the same games every year, but if it ain't broke, don't fix it. They add what they can each year to make the game fun, without stripping away it's best qualities.
    Look at how EA handled Knockout Kings.
    They made Knockout Kings, and the game was mildly successful. They released a few entries in the series, but fans didn't like the controls, or didn't like this, or didn't like that. So what did EA do?
    They brought in some new blood and completely revamped the whole series and turned it into what we now know as Fight Night.

    I do NOT support EA's buying out of Take Two, but just because they are trying to buy out your favorite company doesn't mean EA makes horrible titles all around.

    Just because your friend says EA is a big mean corporation, doesn't mean they don't make good games.

  • Wow, you could make a film dramatization out of this. "The last hope for the sport games genre lies on one company's shoulders: Take Two." That would totally sell.

  • @Raziel3333: Yes, EA has produced a lot of ok-to-crappy games. Guess what, it's what they do. Big companies generally, by virtue of their being large, have the capacity to churn out the sort of grist that all of us Kotaku readers scorn but are often enjoyed well enough by the general public. Think of movie studios. Little indie studios produce one gem (hopefully) a year and all the big budget movies upon which the actual business of movie-going is predicated are made by the big studios. Are the big movies generaly forgettable? Sure. Are they even often crap? Definately. But we all watch them.

    More to the point, there is absolutely no evidence that Take Two will be in any way ruined by this buyout. Do we all think Bioware or Pandemic are going to just start producing crap games? Presumably, someone up top at EA has some business sense (and buying up these smaller companies shows some sense) and would know very well that you don't spend millions to buy Bioware because Bioware needs to be assimilated into EA's corporate structure. No, you buy Bioware and basically everyone at Bioware stays put and they just have a different parent corporation.

  • back the fuck off EA.

  • EA should change their name to BS

    BULLSHITTTTTTTTTTTTTTT

  • Last i checked COD4 wasnt an EA game, Rasta. And no, i havent bought an EA game in years. I've rented a few, but thats it.

    EA does have some good ideas from time to time. The bad thing is, most of the time they half ass the execution and the game ends up being crap. They've really done nothing to correct the negitive attitude people have towards them and that's the problem

  • i wonder what other kinds of poison pills companies can use. i know there was one company that used one which basically meant. if they are bought through a hostile takeover. all software they sold is refunded at 5 times the cost. basically the company loses all of its money o.O

  • @PearceShea: What I'm trying to say in the above, but don't quite get there is that it is perfectly reasonable to expect EA to produce a long string of middling games from its main offices while Bioware, Pandemic et al are relied upon to produce one or two "masterpieces" every few years. I can't imagine why they would spend all this time and money if they planned on squashing T2's creativity and gutting T2's games.

  • Just die EA.

  • The problemisn't what the T2 board do but all the other people who own shares do.

    The 5,000sold to EA are probably the tiny investors with 50 to 100+ shares max.

    Getting an extra $10 is a major win fall, though they are dealing with a russian so he'll screw EA for the max amount of cash before he sells.

    For me battlefield: BC dosen't come across as being exciting, seems to be a quick rip job on army of 2.

  • @Laidbackga:
    Madden has gone down in quality with each iteration since the last console generation.
    the 2kX series in my opinion was the best football franchise to come out, until EA cut the legs out from under them and purchased the NFL license for what I assume will be forever.
    You see that right there is the problem with EA its not that people hate their success, its just that people hate that EA buys things up, and then runs them into the ground.
    EA knows they are the only game in town for licensed football, and the mediocrity of the madden franchise proves that.
    Not every game that comes out of EA's various studios is bad, sometimes they make a good game, however more often than not its average.
    EA is not an evil company they just stand for mediocrity, and fear risk. Thats a hard position to be in when you are in an industry based in creativity.

  • I'm really starting to hate EA.

  • @Rastaman4200: Ummm...COD4 was published by Activision. Also, I think most people are disgruntled by EA's track record of taking a good IP and gimping it. Also, I bought The Orange Box for PS3, and it had many issues. Part of it may be Valve's fault, some EA and some could be attributed to the difficulty of developing (let alone porting) for the PS3. All I know is that they have no qualms putting an inferior product on the market. Which isn't to say all that they touch is crap. I really am enjoying Burnout Paradise on the PS3, and a couple weeks ago I read that they are going to be adding new areas for free. Though, buying new cars might become too cost prohibitive for some.

    I'm just slightly alarmed because I don't want GTA V to become boggled down with microtransations like some of EA's other game are. Was it in the upcoming Battlefield game that you have to purchase additional guns?

    I suppose it just the way the market is heading. *sigh*

  • @naxik: There are a lot. But generally any rule in the organizational documents or public offering documents that greatly hinders the value of stockholders would be easy for the purchasing company to repeal.

    Think of it this way: Take Two's stocks are going up in value with this talk of a buyout. They had been sinking for quite some time. On that level at least, the buyout or at least, the talk of it, is a good thing for Take Two (athe company is, after all, its shareholders and not its executives). The concern here, presumably, is that if the shareholders meeting goes down while the EA offer is on the table, there is a pretty strong chance that the current Take Two execs could be replaced with those more ammenable to selling.

  • Image of huginn huginn at 09:26 AM on 03/28/08 *

    They've been poisoning there stock for EA for a bit now. Little contract boosts to make there company worth 'more' then what the stock price is listed as and making it rather hard for EA to hostile take over it.

    They'll do what ever it takes to delay til GTA4 and then reevaluate the position then. EA knows that the GTA hit is looming, and wants to get in before the goose is cooked much like they did before MassEffect was released and the stock price jumps. Buying companies just before they release AAA titles is clearly apart of there corporate tactics.

  • @ Laidbackga: dude, madden sucks IMO. EA has had exclusive rights to monday night football, espn and the NFL and the animation and presentation still isn't as good as 2k5 on xbox. i watched a friend play madden this past weekend, online and it was total bullshit. who runs back 15 yards to throw a ten yard pass? but this is what i see from too many madden players. playing in the pocket was nonexistent and i saw 6 interceptions in 4 minutes. total bullshit. i saw completions by bum receivers in triple coverage against good secondaries. i watched brian westbrook break three tackles for a td run. since when did westbrook become a power back? ill never play madden unless visual concepts develops it. it's trash. please don't give me sales figures. Wii is the best selling console bar none but that doesn't mean it's the best. madden just goes to show how little some madden fans know about real football.

  • I think that the worl would be better off without EA. Their business model is ill conceived and bears the strategy, if we own the rights to everything, money will flow and we will be loved.

    In reality, they have ruined the NFL license, their quality is lacking, and because they own the rights to everything, they are poisoning the titles that buoyed up the industry.

  • @Habitual Line Stepper: and if you would have read my last comment i admitted a mistake on that...i was under the mistaken impression they did do COD4, and if you missed out on the good titles just because they are EA then your just dumb anyway...anyone who buys a title only because its from a certain publisher isnt a very informed consumer and should do some research on the games.

  • I think speak for everyone when I say this. I don't want EA having Grand Theft Auto, so that I don't have to pay to unlock weapons in the game

  • That's some funny stuff.

    I'm not really a big T2 guy, but anything that pisses EA off is a good move in my book. Keep up the good work ladies and gents!

  • Image of Demonbird Demonbird at 09:44 AM on 03/28/08 *

    Take Two is doing very well here. EA is just, as said before, acting like a spoiled child denied their treat. If EA nabs take two, they would have even more power to do so to other large companies. Take Two just needs to sit on their hands between now and May 1, when they can laugh at EA from their mountains of GTA cash.

  • @NateN: I'm using IE7, and the photo galleries below each post no longer show up.

  • Image of jayntampa jayntampa at 09:47 AM on 03/28/08 *

    The worst aspect of this is, I want neither side to win. Take Two's current leadership is full of greedy bastards that are destroying the company for their own personal wealth, which is why EA is having the opportunity to acquire the company.

    On the other hand, EA Katamari-like acquisition tactics are dangerous for the health of the industry, I believe. So, someone needs to stand up to them successfully.