This morning we reported on SEC filings (yes, there have been enough SEC filings to wallpaper my apartment this week) that revealed that Electronic Arts has amended its offer to purchase Take-Two. The previous offer expired today, but EA's back for round two, extending its deadline to May 16th. Although some analysts have speculated that EA would need to raise its offer in order to cinch this acquisition, the same SEC filing also shows that some change has actually been shaved off of the previous bid of $26 per share - the new bid is $25.74 per share.
Why, then, is the bid lower? Well, it's not because EA docked it. Last night, about an hour after Take-Two's annual meeting, the results of the vote that took place were announced, and as it turns out, Take-Two shareholders approved the extra cash and the 780,000 shares that the management team was seeking. The approval of that compensation package dilutes EA's offer - more stock equals less value per share - but many current shareholders were not allowed to vote last night. Only those who bought Take-Two stock prior to February 19th got a say - even if they don't own any stock anymore. In other words, Take-Two itself reduced the per-share value of EA's bid, even though the aggregate amount of the offer hasn't changed.
We'd heard some rumors out of Asia that this deal was already sealed behind the scenes, but when we spoke to Owen Mahoney, EA's senior VP of Corporate Development, he stated, "It's not in the bag." We also heard from Take-Two this morning that only 8.3 percent of total shares had been sold to EA.
Where does EA stand, then? Mahoney tells us the clock is ticking for this deal. Hit the jump for our full interview, plus comments from Strauss Zelnick on his side of things.
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