No End In Sight: EA Extends Take-Two Offer Again

Electronic Arts has announced this morning it has extended the deadline for its acquisition of Take-Two until July 18th, after the previous deadline expired at market close yesterday.

The publisher has not, however, raised its offer above $2 billion, or $25.74 per share, as the FTC's investigation process continues. Take-Two was recently asked to explain to the U.S. district court of Washington, D.C why it is refusing to fully comply with the commission's information request. Take-Two risks an injunction if it doesn't provide the full scope of info, which has been speculated to pertain to portions of its sports portfolio.

EA senior VP of corporate development Owen Mahoney congratulated Rockstar on Grand Theft Auto IV's successful launch, but maintained that despite the title's success, EA's offer "reflects a full and fair price based on the long-term value of Take-Two's entire operation."

When Kotaku spoke to Mahoney about the deal, he said that the longer the process goes on - both Take-Two's resistance and possible delays due to FTC investigations - the less valuable it is to EA. That was back in April, and it's now June.

Plus, EA's agreement with the FTC means the publisher will wait 45 days beyond the time that compliance by both parties is determined to be complete, which drags the process out even further. Is time still a factor?

"That's every bit as true today as when Owen said it a couple of months ago," said EA VP of corporate communications Jeff Brown. "Time erodes the value of this deal."

The FTC has asked to review a large volume of information across two separate requests; for EA's part, Brown says that it's taking them some time to put the information together. "It is our intention to [fully comply]," he said. "There's no dispute on our side."

Take-Two board chairman Strauss Zelnick recently made some bold comments at an investor event, claiming that its portfolio, particularly in the contentious sports arena, out-rates EA's in a head-to-head comparison, information that, if true, might suggest that EA needs a higher offer to seal the deal.

"It seems like Strauss has been playing football without a helmet; he needs to check his numbers," said Brown.

Kotaku has requested comment from Take-Two, and will update with any response we receive.

As of today, only an insignificant portion of Take-Two shares - 6,139,824, or 7.9 percent of the total - have been tendered to EA.

Said Zelnick, "The latest extension of EA's unsolicited, highly conditional tender offer does not alter the fact that their proposal still significantly undervalues Take-Two, a fact that is reflected in the overwhelming number of stockholders who still have not tendered their shares."

"Our Board of Directors remains in unanimous agreement that the proposal is contrary to the best interests of Take-Two stockholders, and the Board continues to recommend that stockholders not tender their shares to EA. The Board remains focused on the strategic process that began formally on April 30 to consider all alternatives to maximize value. We believe that these alternatives, which may include a business combination or remaining independent, will deliver greater value to stockholders than the current EA offer."