EA Proposes to Acquire Take-Two Interactive Software

[sleepytercel]

Quote: Originally Posted by whittleboy615

I know this is a pretty unpopular opinion, but I see this deal as having a lot of great potential. New ideas from different developers would be a very good thing. If EA and 2K dev's are able to work together and combine the best of both games, almost every sports title would benefit from this deal. Madden and NCAA + All-Pro Football NBA Live + NBA 2K March Madness + College Hoops MVP Baseball + MLB 2K NHL + NHL 2K MLB the Show would not be affected, unless EA acquired the exclusive license. FIFA wouldn't be affected either. Non-sports titles like Bioshock, GTA, etc. would be benefited. EA is not going to stop making them--they are not stupid. These games bring in a ton of money. And their developers would not get replaced--it would just be a change in ownership to a company with more marketing power.

If you lived in an ideal world, this would be nice. However, this is reality, and videogames are not that easy to make. It's not this simple, and ideas clash. Priorities clash. Having too many people work on a project will clash. You need to keep these things seperate, as it's the only way to keep the games really progressing. They feed off each other better by working seperately.

[Shakedowncapo]

Ok, time to end this thread.

Quote:

TAKE-TWO INTERACTIVE SOFTWARE'S BOARD REJECTS ELECTRONIC ARTS' UNSOLICITED PROPOSAL AS INADEQUATE New York, NY - February 24, 2008 --The Board of Directors of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today confirmed that it has received an unsolicited proposal from Electronic Arts Inc. (NASDAQ:ERTS) to acquire Take-Two for $26.00 per share in cash. Take-Two's Board of Directors has thoroughly reviewed EA's unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is inadequate in multiple respects and not in the best interests of Take-Two's stockholders. After careful evaluation, the Board has determined that EA's proposal substantially undervalues Take-Two's robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty. We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry. Furthermore, the offer values the Company at a significant discount to its public peers and does not compensate Take-Two for its intrinsic value and the substantial synergies that the proposed combination would create. Strauss Zelnick, Executive Chairman of the Board of Take-Two commented, "Electronic Arts' proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company. Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry. We're extremely proud of our unique portfolio of game franchises, exceptional creative talent and loyal consumer following. Our Board believes that we will build greater value for our stakeholders by remaining relentlessly focused on our strategy and delivering on our mission of making the highest quality interactive entertainment." Mr. Zelnick continued, "In addition to undervaluing key elements of our business, EA's proposal fails to recognize the value we are building through our ongoing turnaround efforts, which will further revitalize Take-Two. While we have made substantial progress already, the turnaround of our business which we initiated in June is not yet complete, and we believe its benefits have not been recognized in either our current stock price or in the value of EA's proposal." Mr. Zelnick added, "While the Board believes that entering into discussions with EA at this time is not in the best interests of shareholders, we had offered to enter into a good-faith dialogue with EA to determine if our companies can reach common ground on the appropriate value of Take-Two as a first step to realizing a mutually beneficially transaction. However, given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released. Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release). We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA's refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders." Take-Two has a proven track record of creating and acquiring ownership of valuable new intellectual property. Grand Theft Auto is one of the industry's top franchises, having sold more than 65 million units to date. Over the past year, Take-Two has continued to expand its owned intellectual property portfolio, with two new franchises established - BioShock, one of the highest rated games of all time and winner of numerous "Game of the Year" awards, which has sold over 2 million units to date - and Carnival Games, a casual game for the Wii™, which has sold over 1 million units to date. Take-Two's other proven million-unit selling video game franchises include Midnight Club, Sid Meier's Civilization, Bully, Red Dead Revolver, Max Payne, Rockstar Games presents Table Tennis, Manhunt, Red Dead Revolver, Mafia, The Darkness, Spec Ops, Sid Meier's Railroads! and Sid Meier's Pirates! Take-Two also has powerful and growing sports franchises, with licenses for leading brands, including Major League Baseball® 2K, NBA® 2K and NHL® 2K, and proprietary sports brands, such as Top Spin, All Pro Football and Don King Presents: Prizefighter. Additionally, Take-Two has a partnership with Nickelodeon to publish video games based on top rated Nick Jr. titles such as Dora the Explorer and Go, Diego, Go! Ben Feder, Chief Executive Officer of Take-Two, commented, "The revitalization of Take-Two is well underway. In the last year, we have accomplished a great deal in terms of restructuring our cost base to improve margins, addressing the legacy issues that have weighed on our business, and enhancing our creative output through organic and external initiatives. We believe stockholders will reap the benefits of these actions both in the near and long term and that our efforts will create greater value for stockholders than what is being offered by EA at this time." As part of its turnaround plan, Take-Two has implemented a more streamlined and efficient operating structure, put in place a $25 million cost cutting initiative, instituted a disciplined Product Investment Review Process, restructured international operations to create a more efficient and responsive international organization, consolidated the majority of 2K Games and 2K Sports operations on the West Coast to increase efficiency and better support the growth of these labels, and sold its non-core Joytech business. To continue to position itself for the future, the Company has begun to more aggressively leverage potential growth opportunities, with the acquisition of Illusion Softworks development studio and the formation of the 2K Play label to focus on the family and casual games market. In addition, current management has secured a $140 million line of credit, announced a preliminary settlement of the "Hot Coffee" class action and made significant progress in resolving the New York District Attorney and SEC actions that have been pending against Take-Two since June 2006 and July 2006, respectively. Mr. Feder concluded, "We remain committed to executing our existing business strategy and turnaround plans and to building value for all of our stockholders. We intend to vigorously resist any attempt by EA to acquire Take-Two at a price that does not adequately value our Company and its growth opportunities." Bear Stearns and Lehman Brothers are acting as financial advisors to Take-Two and Proskauer Rose LLP is acting as a legal advisor. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. For more information, please visit http://www.transactioninfo.com/taketwo/ Take-Two's and EA's letters regarding the proposal are included below.

Breathe easy now fellas.

[whittleboy615]

Quote: Originally Posted by Leahmic223

Also I think EA should allow 2k Sports to live on and make their games to compete with EA sports. They are still getting the money from both games and at least it would make the quality of both games better...and also some people (like me) would buy both bball games as I do every year. So instead of getting 60 buck off of me they could get 120 because I usually end up buying both because...I don't know I just do it to see which is better. But I know I am not the only one who does this.

EA is not going to compete with themselves. A lot of people who only buy 2K games would switch and buy the one EA game. There are few people like you who buy both games, and EA would make more profit by making one great game that has a lot of new features, ideas, and tweaks that would be made by the addition of the 2K dev teams.

[jdros13]

The offer isn't that great IMO...as someone else said I would expect the stock to be trading near the $24-25 level when GTA IV is hitting shelves....Of course based on the timing I'm guessing that EA wants to capitalize on the release of GTA IV. The sports stuff is simply an afterthought for now.

If the offer was $30/share, I'm guessing we might have a deal. I don't expect this offer will amount to anything...for now anyway.

edit: I posted this before the press release above me was in the thread...what that says is basically what I think too.

[govermentuser85]

sweet new mvp baseball game.

[Salhus]

EA is Nazi Germany...

[Rocky]

Quote: Originally Posted by YankeePride_YP

I think people are overreacting, really. We're basing the hate on EA because of their Live and Madden series. That's two games out of a collection of releases that people happen to enjoy. I'm not sure if Take 2 could honestly survive without someone buying them out. EA has the money to do so. They are just taking advantage of a perfect opportunity in their eyes. I just wouldn't get all upset about this based on two games that only half of the members in this community do not like. There seems to be a lot of people that enjoy playing Madden and Live and they even post here regularly. So are they less sim/sports fans than the rest of the board members?

It's about having choices. People like the Madden/NBA Live series or Tiger Woods/FIFA/Nascar Thunder or whatever. That's cool, but there are alot of people that do not like those games and enjoy the Papyrus Nascar series or The Show or College Hoops or APF2K8 and when EA attempts to make a move that will effectively eliminate those games from the market, of course consumers are going to freak.

This deal was probaly less about 2K Sports and more about Rockstar but nonetheless the colateral damage from this is going to suck hard for me. I don't work for EA so why in the hell would I be happy for this "great business move" they have made. I've been enjoying sports games since 1992 but if this deal goes down my interest will wane in video gaming altogether.

[superjames1992]

It's not like we could not see this coming...

[NBA2k8 CHAMP]

Quote: Originally Posted by Leahmic223

Also I think EA should allow 2k Sports to live on and make their games to compete with EA sports. They are still getting the money from both games and at least it would make the quality of both games better...and also some people (like me) would buy both bball games as I do every year. So instead of getting 60 buck off of me they could get 120 because I usually end up buying both because...I don't know I just do it to see which is better. But I know I am not the only one who does this.

That's exactly what I said!!!

If you're a business man why would you take 1 when you can get 2 for the price of 1!!!

2k would just be paying EA to publish and it will be more marketing for NBA 2k and All-pro football

They are basically trying to get money off of GTA IV that's all they're talking about

[bcruise]

Quote: Originally Posted by Shakedowncapo

Ok, time to end this thread. Breathe easy now fellas.

So, they're more or less telling EA to shove that offer until after GTA4 is released, and even then they claim EA to be undervaluing 2k.

I'd be very surprised if this ever happens. Thanks for posting that.