Electronic Arts, the videogame publisher juggernaut, last
week during the Game Developers Conference proposed a takeover of Take-Two
Interactive. The proposal was reported to include an offer of $26 per share of
Take-Two, making the deal with a total of around $2 billion.
According to reports, EA previously offered Take-Two $25 per
share, making the latest offer of $1 more a sign of the EA’s continued
interested in a merger. But Take-Two has rejected EA’s best offer.
In press release
sent out on Sunday, Take-Two Interactive confirmed that it has turned down EA’s
offer to acquire the company for $26.
“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,”
read the Take-Two Interactive statement. “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.”
While stock of Take-Two Interactive currently sits at around
$17, the company wasn’t entertained by EA’s offer of $26. “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,” added Take-Two.
EA CEO John Riccitiello said of the offer, “There can be no
certainty that in the future EA or any other buyer would pay the same high premium
we are offering today.”
Were a merger between EA and Take-Two to take place, sports
games fans may suddenly find their options halved. The only major competitor
against the EA Sports franchises is Take-Two’s 2K Sports.
Earlier this month, Riccitiello pledged that EA developers and
properties would be better
taken care of and less stifled than previous acquisitions such as Westwood
Take-Two’s most valuable asset is its close relationship
with Rockstar Games, which contractually ends this year. It is expected,
however, for Rockstar Games to renegotiate a new agreement with Take-Two