EA terminates Take-Two takeover attempt

EA terminates Take-Two takeover attempt
Michael French

By Michael French

September 14th 2008 at 11:00PM

Riccitiello's acquisition attempt aborted, but Take-Two is still considering "strategic alternatives" with other parties

The will they/won't they dance is over - Electronic Arts has decided to end its bid to acquire Take Two.

EA CEO John Riccitiello's decision to move away from the chance to combine businesses with the Rockstar Games parent comes after "careful consideration, including a management presentation and review of other due diligence materials".

It also comes after six months of intense speculation following the comparable Vivendi acquisition of Activision which created Activision-Blizzard.

"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 Sport titles on this generation of consoles," said Riccitiello in a statement confirming the cessation of takeover talks.

"We're also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online."

EA's original bid, made in February, was unsolicited and repeatedly rejected by Take Two management and its board - only recently did the two confirm that they would discuss the matter frankly behind closed doors (and under NDA) to see if the proposal would work.

But it seems that the two businesses aren't meant to be together - or at least, not at the price Take Two's team thinks the business is worth. Statements by the publisher's management in response to Riccitiello suggest that their reform of what was a struggling games firm until a board-level reshuffle last year has raised its perceived value. Indeed, a statement from Strauss Zelnick, chairman of the Board of Take-Two, says the company is "actively engaged in discussions with other parties [...] to consider strategic alternatives".

He said: "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.

"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. 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."

Ben Feder, CEO 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."