EA Extends Take-Two Offer As FTC Continues Investigating

It had to happen - EA has extended the expiration date for its bid to acquire Take-Two, while the Federal Trade Commission continues its investigation. Although EA recently certified its compliance with the FTC's broad-ranging request for information, the publisher reached an agreement with the FTC through which it promises not to complete any acquisition until August 21.

In that fashion, the extension is merely a formality, to allow the bid to remain outstanding until the investigation concludes. The new bid deadline is now August 18, so it's safe to assume we'll see at least one more extension at that time, since any move EA makes would need to be after the 21st.

It looks like EA has made a bit of small gain, though, as far as the likelihood of bringing the acquisition to fruition:

EA's $2 billion tender offer remains the same, at $25.74 per share. Take-Two's stock has seen a small decline in recent weeks, though, after spending several weeks trading at a somewhat higher valuation than EA's offer. Either due to the drop-off in GTA IV-related investment or due to an overall downturn in the economy, Take-Two currently trades at about $25 per share, apparently making EA's offer more attractive to investors.

Almost twice the number of Take-Two shares have been tendered to EA since the last bid extension — EA has now been sold 11,741,339 shares by Take-Two investors, as opposed to 6,139,824 about a month prior. This still represents only about 15% of the whole, far from the majority EA needs, but it's a sign that more investors may be ready for a sale.

Board chairman Strauss Zelnick reiterated his monthly recommendation that shareholders not tender their shares, while stating again that other, unspecified parties are interested in acquiring the company.

"We are fully engaged in a formal process to evaluate strategic alternatives that have the potential to deliver greater value than EA's inadequate offer," said Zelnick. "As part of this process, we continue to engage in meaningful discussions with multiple parties, a number of whom have been conducting due diligence. We also remain absolutely focused on executing on our strategic and business objectives."