IllusionMPN Posted February 24, 2008 Share Posted February 24, 2008 We reported on this topic about a month ago, and now we have some further evidence to back up the rumors that have been floating around. EA seems to be one step closer to acquiring Take-Two, which is the parent company to Rockstar. CVG has reported that EA proposes to acquire Take-Two in an all-cash deal valued at approximately $2.0 billion. One of the larger assets that Take-Two has under it's belt is Grand Theft Auto. With it's debut coming this April development on the title would be essentially complete. EA had warned Take-Two's bosses that if they refused to engage in negotiations, the company would go public with its bid. Today, EA made good on that threat. The full letter from EA to Take-Two is provide below. February 19, 2008Mr. Strauss Zelnick Executive Chairman of the Board of Directors Take-Two Interactive Software, Inc. 622 Broadway New York, NY 10012 Dear Strauss: Thank you for your letter of February 15, 2008. While I appreciate its courteous tone and value our ongoing dialogue, I am disappointed that you have rejected Electronic Arts Inc.'s ("EA's") $25 per share cash offer to acquire Take-Two Interactive Software, Inc. ("Take-Two") and declined to engage in the friendly negotiations we proposed. We continue to believe that an acquisition of Take-Two by EA is in the best interests of your shareholders, employees and other constituents, and we remain interested in acquiring Take-Two. So, to further demonstrate our seriousness and encourage you to move forward now, I am writing to increase EA's offer to acquire all of the outstanding shares of Take-Two to $26 per share in cash. This offer is subject to Take-Two agreeing by February 22, 2008 to commence negotiation of a definitive merger agreement and to permit EA to commence a limited due diligence review of Take-Two. Our revised all-cash offer represents a 64% premium over Take-Two's most recent closing price and a 63% premium over Take-Two's 30-day trailing average price (based on prices as of market close on Friday, February 15th). We believe our offer represents a unique and compelling opportunity for Take-Two shareholders to maximize the value of their investment in the company, with materially lower risk than if Take-Two proceeds on a stand-alone basis. We also believe that the transaction we are proposing represents a uniquely attractive opportunity for Take-Two's creative teams and key employees. EA is a diversified leader with well-established franchises and proven intellectual properties, global reach, and significant financial resources. I know we both agree that Take-Two's talented creative teams deserve a permanent home within a stable and growing publisher that provides these teams an environment to do what they do best - create great games. EA is organized in a four-label model that provides our creative teams the autonomy they need to fully realize their creative ambitions, while also providing a stable and supportive corporate and publishing infrastructure which allows them to best address the global marketplace. We have the resources to make the significant investments in technology and infrastructure needed for the most creative and innovative games in the industry. In short, a combination with EA would provide Take-Two's studios and employees a combination of the right resources for investment and global reach, and the right environment to do their best work. We believe that Take-Two's shareholders would not be well-served by any further delay in negotiating and completing the proposed merger. While the videogame industry remains an attractive, high-growth business, the challenges and risks in the business are escalating, and the need for scale is becoming more pronounced. Despite steps taken since March 2007, Take-Two remains dependent on a limited number of titles, and has limited capital resources. In addition, Take-Two faces ongoing financial, legal and operating issues and a very intense competitive environment. Given these factors, we believe it will be increasingly difficult for Take-Two to create sustainable shareholder value and that Take-Two remains exposed to considerable risk of value loss. We also believe that any delay in this proposed transaction works against the interest of Take-Two's shareholders, because: -- There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today. We place significant value on the ability to close the transaction relatively quickly so that EA's strong publishing and distribution network, including our global packaged goods, online and wireless publishing organizations, can positively impact the catalogue sales of GTA IV and also the launch and sale of titles released later this year. We want to work with you and your team to complete the transaction in time to begin realizing its significant marketplace benefits in advance of this year's holiday selling season. -- We believe Take-Two's current share price already reflects investor expectations for a strong release of GTA IV as well as the longer-term issues that Take-Two faces. Once GTA IV ships, Take-Two will again be dependent on less-popular titles and face increasing challenges to compete with larger and better-capitalized competitors. -- With GTA IV shipping on April 29, development on this important title must now be essentially complete. We believe now is the right time to complete a transaction with minimal disruption for Take-Two. We also believe the transaction we are proposing will create value for EA's shareholders. In addition to the top-line benefits noted above, we can achieve bottom-line benefits by combining Take-Two's and EA's corporate and publishing infrastructures and by optimally supporting Take-Two's creative teams and intellectual properties in EA's decentralized label structure. Considerable thought, time and resources have been put forth in developing this offer, and our Board of Directors unanimously supports it. Our offer is not conditioned on any financing requirement. It is subject to the satisfactory completion of a due diligence review of Take-Two, the negotiation and execution of mutually acceptable definitive transaction agreements, and the satisfaction of customary conditions to be set forth in such agreements. We are prepared to move forward immediately with formal due diligence and the negotiation and execution of a definitive merger agreement and believe that with adequate access to the necessary information and people, we can complete both in approximately two weeks. We believe that our due diligence review can be completed with minimal disruption, requiring only limited access to a small number of senior executives of Take-Two and its legal, accounting and financial advisors. We also have prepared a draft merger agreement that we can forward to you immediately. Our strong preference is to conduct a private negotiation. If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two's shareholders. I am available to meet and discuss any and all aspects of this proposal with you and your Board. Again, we believe this proposal represents a unique opportunity to maximize value for Take-Two's shareholders, and that the combined enterprise would be extraordinarily well positioned to build value for our respective customers, employees, developers and other business partners. We hope that you and your Board share our enthusiasm, and we look forward to hearing back from you by February 22. Document provided by Next-Gen.Biz Link to comment Share on other sites More sharing options...
IllusionMPN Posted February 24, 2008 Author Share Posted February 24, 2008 After two offers made by Electronic Arts for Take Two, the end result is Take Two rejecting these offers. It was published in their statement with this headline; "AKE-TWO INTERACTIVE SOFTWARE'S BOARD REJECTS ELECTRONIC ARTS' UNSOLICITED PROPOSAL AS INADEQUATE." 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 [Take-Two] 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). EA has given reasons as to why Take Two should be bought out: - EA believes that Take-Two's current share price already reflects investor expectations for a strong release of GTA IV as well as the longer-term issues that Take-Two faces. Once GTA IV ships, Take-Two will again be dependent on less-popular titles and face increasing challenges to compete with larger and better-capitalized competitors. - With GTA IV shipping on April 29, development on this important title must now be essentially complete. We believe now is the right time to complete a transaction with minimal disruption for Take-Two. In the end, Take Two has refused to accept the buy over, since they believe EA is just trying to profiteer on their upcoming released. Original Article: TakeTwo Link to comment Share on other sites More sharing options...
MrLlamaLlama Posted February 24, 2008 Share Posted February 24, 2008 Good for T2, EA would fuck everything up for them. I want R* making GTA, not some piss - ass moneyspinning morons. Link to comment Share on other sites More sharing options...
IllusionMPN Posted February 24, 2008 Author Share Posted February 24, 2008 Ya I agree, EA is out for quantity not quality. Link to comment Share on other sites More sharing options...
Kitsune Inferno Posted February 25, 2008 Share Posted February 25, 2008 If I were a Rockstar representative, I'd print out those statements by EA and wipe my ass with them. Fuck EA for trying to profit off better games that they have no business messing with. Link to comment Share on other sites More sharing options...
MishoM Posted February 25, 2008 Share Posted February 25, 2008 You know, I wonder why Microsoft doesn't just buy Take-Two or Rockstar Games, they have the money, and just imagine GTA IV being exclusive to the Xbox 360. I wonder why they don't... Link to comment Share on other sites More sharing options...
rockstarrem Posted February 25, 2008 Share Posted February 25, 2008 If EA got Take2 that would suck. Link to comment Share on other sites More sharing options...
Mike356 Posted February 25, 2008 Share Posted February 25, 2008 it be a sad day when ea got take two a very sad day Link to comment Share on other sites More sharing options...
aaa11 Posted February 25, 2008 Share Posted February 25, 2008 You know, I wonder why Microsoft doesn't just buy Take-Two or Rockstar Games, they have the money, and just imagine GTA IV being exclusive to the Xbox 360. I wonder why they don't... if they did it would be flucked up with aliens, zombies and shit. R* doesn't want that Link to comment Share on other sites More sharing options...
DemonDelight Posted February 25, 2008 Share Posted February 25, 2008 i say, leave well enough alone, there is nothing the two companies can gain from ths anyway, and im sure thats what Take Two saw also. Link to comment Share on other sites More sharing options...
Urbanoutlaw Posted February 25, 2008 Share Posted February 25, 2008 i say, leave well enough alone, there is nothing the two companies can gain from ths anyway, and im sure thats what Take Two saw also. EA stands to gain money, at least in the short term. They should buyout Sierra/Vivendi, anyone who's fought w/ Scarface, it's glitches & their excuse of a patch knows what I mean. Take Two & R* aren't broke, don't try to fix 'em. Link to comment Share on other sites More sharing options...
Ciaran Posted February 25, 2008 Share Posted February 25, 2008 You know, I wonder why Microsoft doesn't just buy Take-Two or Rockstar Games, they have the money, and just imagine GTA IV being exclusive to the Xbox 360. I wonder why they don't... How about nobody buys Take-Two? Then we're all happy. Link to comment Share on other sites More sharing options...
GTA Don Posted February 25, 2008 Share Posted February 25, 2008 I'm happy. Misho, that would really suck, I mean it would really suck (for the PS3 owners). Link to comment Share on other sites More sharing options...
Swifty Posted February 25, 2008 Share Posted February 25, 2008 Jesus Christ, how stupid do EA think Take-Two are? They would be idiots to sell moments before dropping their biggest title of the year. EA have nothing to offer R* in terms of the developement of GTA so I would be pleased to see them jump ship if Take-Two were taken over. Link to comment Share on other sites More sharing options...
Mendoza Posted February 25, 2008 Share Posted February 25, 2008 FCK EA THEY WOULD RUIN THAT GTA NAME Link to comment Share on other sites More sharing options...
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