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According to Next-Generation and GamesIndustry, EA has received a $1 billion loan commitment, to support its bid for Take-Two.

Quote:
"The funding organizations will be able to provide EA with up to $1 billion of senior unsecured loan term financing at any time until January 9, 2009. Funds would be used towards offer "and/or the merger."

Member Comments
# 1 savoie2006 @ 05/09/08 09:43 PM
Great...so long Take Two!By the end of summer this should be in the books.
 
# 2 JBucc @ 05/09/08 09:48 PM
That's a big *** loan. So, they offered 2B before right? What the hell are they gonna do now offer 3B?
 
# 3 Knight165 @ 05/09/08 09:57 PM
DIG A HOLE EA!
Hope you bury yourself!

M.K.
Knight165
 
# 4 luv_mist @ 05/09/08 10:14 PM
WOW!! I'm clearly speechless in regards to this buyout thing. WOW!! One of two things can happen. Either a success with the merging or what Knight165 stated.......
 
# 5 savoie2006 @ 05/09/08 10:29 PM
I highly doubt EA is gonna bury itself.After all its cash cow is going to be released this summer(Madden 09).
 
# 6 muggins @ 05/09/08 11:44 PM
Quote:
Originally Posted by luv_mist
WOW!! I'm clearly speechless in regards to this buyout thing. WOW!! One of two things can happen. Either a success with the merging or what Knight165 stated.......
The first one would definitely not be a success for gamers.
 
# 7 Crimsontide27 @ 05/10/08 01:35 AM
They can eventually offer enough cash that there is no way Take Two would / could say no. Im afraid this is just the beginning of a tragic sequence of events that will bring the quality of video games crashing to their knees.

Doesnt matter what company you like better or what genre of games you like better, the gamers lose in the end, no matter what camp you are in.
 
# 8 Mo @ 05/10/08 01:51 AM
Quote:
Originally Posted by mugginns
The first one would definitely not be a success for gamers.
neither of those two options would be a success for gamers
 
# 9 ChaseB @ 05/10/08 02:25 AM
It doesn't seem like a huge development; it's just EA making sure that if a deal goes through that it's another stopgap in place.
 
# 10 savoie2006 @ 05/10/08 10:50 AM
Quote:
Originally Posted by Slizeezyc
It doesn't seem like a huge development; it's just EA making sure that if a deal goes through that it's another stopgap in place.
To me it seems like a measure to help insure the deal happens.
 
# 11 ChaseB @ 05/10/08 10:50 AM
Quote:
Originally Posted by grunt
Why would EA have to borrow money to make this deal happen. Doesn't make great business sense.
I assume so they don't have to report the entire buyout in the financial report as a loss or whatever if it goes through.
 
# 12 mercalnd @ 05/10/08 10:58 AM
Quote:
Originally Posted by Slizeezyc
I assume so they don't have to report the entire buyout in the financial report as a loss or whatever if it goes through.
Actually I'm pretty sure that this type of acquisition qualifies as a capital asset and therefore would be able to be amortized over a certain number of years as far as accounting goes. Also, paying cash or getting a loan is strictly a cash flow thing and doesn't effect reported revenues and losses.
 
# 13 ChaseB @ 05/10/08 11:48 AM
Quote:
Originally Posted by mercalnd
Actually I'm pretty sure that this type of acquisition qualifies as a capital asset and therefore would be able to be amortized over a certain number of years as far as accounting goes. Also, paying cash or getting a loan is strictly a cash flow thing and doesn't effect reported revenues and losses.
I did forget it's an all cash deal so my bad there.

I think the deal would be alright to happen with or without the loan is the whole point. I assume they applied for the loan a bit ago and it's just another insurance policy now that EA has had more time to wait.

While I think an eventual buyout is still inevitable it seems like with the positive impact of GTA, Zelnick could say to the board and co. now let's wait on the DLC and wait for another spike, which maybe leads him to say let's wait until the end of the quarter post-September DLC. So it could still be some ways off.
 
# 14 bkfount @ 05/10/08 11:52 AM
Quote:
Originally Posted by Knight165
DIG A HOLE EA!
Hope you bury yourself!

M.K.
Knight165
actually, EA is like the atari of this generation. They are the massive gaming company, and they don't even put out hardware. Them going under for whatever reason would mean the whole industry is in bad shape.
 
# 15 Tomba @ 05/10/08 01:07 PM
we're all so screwed....
 
# 16 bad_philanthropy @ 05/10/08 06:34 PM
Man, one company with the properties of Grand Theft Auto, Madden, and The Sims. Not to mention other huge franchises. Ridiculous.
 
# 17 lasthour @ 05/10/08 09:41 PM
Am I the only one that thinks EA is going to release its on system? It just seems too obvious to me, buy all you can buy, put out a system that has all the games on them and watch the competition run or die off period.
 
# 18 BobbyColtrane @ 05/10/08 10:17 PM
i wonder what GTA V released by EA will look like.
 
# 19 ChaseB @ 05/11/08 12:54 AM
Pachter chimed in a bit and just said more of what I said basically, that it's not unusual for this to happen. The only thing he thought might happen now was an upping of the offer, which wouldn't be surprising either.

He also said that EA was a little strapped for cash after the Pandemic/BioWare merger and hence why they did this as well, in case it does go through.
 
# 20 savoie2006 @ 05/11/08 12:19 PM
Quote:
Originally Posted by Slizeezyc
Pachter chimed in a bit and just said more of what I said basically, that it's not unusual for this to happen. The only thing he thought might happen now was an upping of the offer, which wouldn't be surprising either.

He also said that EA was a little strapped for cash after the Pandemic/BioWare merger and hence why they did this as well, in case it does go through.
Yes,it's insurance for their buyout of Take Two.This way they can up their bid to Take Two's liking and not be completely strapped afterwards.Though I still find it hard to believe EA would be low on funds,but I guess constantly trying to buy the competition can do that to ya.
 

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