After months of courting Take-Two Interactive, Electronic Arts has officially withdrawn all interest in acquiring the games publisher.
EA today sent over the business wire notification that, “after careful consideration,” it has decided to not make any further proposals and has terminated any acquisition discussions with Take-Two Interactive Software.
Take-Two seemed to take the break-up news quite well, maintaining its independence. “We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders,” Strauss Zelnick, Chairman of the Board of Take-Two, commented.
Ben Feder, Chief Executive Officer of Take-Two, added, “Take-Two’s business has continued to strengthen since the time EA first made its offer. We have delivered terrific products to our consumers and we’ve been rewarded with very strong financial performance. We have an exciting future ahead of us, powered by our profitability, a significant cash position, the absence of debt, an undrawn credit facility and a terrific lineup of games. We are confident in the unique value of our business given our strong position in what is a growing and dynamic industry,”
Take-Two was targeted by EA for acquisition just prior to the release of Grand Theft Auto IV, which will undoubtedly be Take-Two’s biggest seller of 2008. While EA will not be getting any of Rockstar’s glory, John Riccitiello, Chief Executive Officer of EA, was more than happy to point out how well it will do with its own lineup. “EA is tracking toward a record breaking year. We’re launching 15 new games including award-winners like SPORE, Dead Space and Mirror’s Edge, great new titles from the Sims, new family titles with Hasbro, and the highest quality slate of EA SPORTS titles on this generation of consoles. We’re also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online,” he said.
While things may be mostly rosy for EA, Take-Two investors aren’t beaming at the failed deal. According to Bloomberg, shares of Take-Two declined from a high of $27.65 on June 5 down to $15.93 this morning. Take-Two shares lost $5.96 immediately on the release of the news. EA, on the other hand, held up better, falling only $1.22 to a share price of $43.77.
At one point, EA was offering shareholders of Take-Two stock $25.74 a share, which by today’s current position appears to be a good deal.
Although it had blocked EA’s entry, Take-Two management sounds open to other possibilities. “As part of that commitment, we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives,” said Zelnick. “We’re especially proud of the success we’ve enjoyed over the past eighteen months and we remain confident in our ability to generate value for stockholders.”
