EA Rejected By Take-Two Interactive >
2008/02/25 6:46:59: Posted by vividbreeze
Take-Two Interactive software's board rejects Electronic Arts' unsolicited proposal as inadequate. Good job Take-Two! Click read more for full press release.


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.

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Written by Krogan Battle Master Urdnot Wrex on 2008/02/25

Bioshock is an amazing new series, and that alone might be the reason why EA was so interested in Take-Two.

I'm just glad that Take-Two will remain as they are--committed to focusing on quality software, rather than using a "lowest common denominator" sort of development plan. Games like Bioshock end up being released for the Xbox 360 and PC, but not the Playstation 3 and Wii using that sort of development plan; however, that is what is ultimately what is best, because the Xbox 360 and PC are the only hardware platforms capable of delivering that kind of high-performance software.
Written by kungfurabbit on 2008/02/25

you like starting arguments don't you penis wrinkle.
Written by SupremeChaotic on 2008/02/25

If so, at least he can do it without the immature name calling...
Written by kidkit on 2008/02/25

i prefer name calling to sensationalizing :)
Written by The Ow In Wow8 on 2008/02/25

kungfurabbit: Why are you accusing Krogan of starting arguments? He's not starting any arguments..if anything its you. you need to grow up.
Written by blacktiger on 2008/02/25

actually Kungfurabbit is right, he is sort of argument,

but u know what i dont' care cause kroganato is right, i dont think anybody wants ea to buy of take two but tae two did say , lets discuss after grand theft IV release !!!

so u never know !
Written by kungfurabbit on 2008/02/25

No it just pisses me off that krogan is insinuating that the ps3 couldn't run a game like bioshock. I know and you know that the ps3 could handle bioshock easily.
Written by kungfurabbit on 2008/02/25

360 and pc the only hardware capable of delivering that kind of performance . BS krogan !
Written by cowl on 2008/02/26

die ea and ms
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