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Electronic Arts Proposes to Acquire Take-Two Interactive Software for $2 Billion

Discussion in 'BBS Hangout' started by RC Cola, Feb 24, 2008.

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RC Cola Member

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http://biz.yahoo.com/bw/080224/20080224005062.html?.v=1

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (“EA”) (NASDAQ: ERTS - News) today announced that it has proposed to acquire Take-Two Interactive Software, Inc. (“Take-Two”) (NASDAQ: TTWO - News) in an all-cash merger valued at approximately $2.0 billion.

EA’s proposal of $26 per share in cash represents a premium of 64 percent over Take-Two’s closing stock price on Feb. 15th, the last trading day before EA sent its revised proposal to Take-Two, and a 63 percent premium over Take-Two’s 30-day trailing average price over the thirty trading days ending on that date.

EA’s proposal was contained in a letter sent on Feb. 19th by EA Chief Executive Officer John Riccitiello to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two. The Take-Two Board’s subsequent rejection of the EA proposal led to EA’s decision to release the letter and bring its proposal to the attention of all Take-Two shareholders.

Mr. Riccitiello said today: “Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.”

The EA letter warned that further Take-Two delay in accepting EA’s proposal could prevent Take-Two’s shareholders and other constituents from realizing its benefits. “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today,” Mr. Riccitiello wrote. The letter added that timely completion of the proposed transaction would allow EA’s strong publishing and distribution network to positively impact the ongoing post-launch sales of GTA IV and support the new Take-Two titles scheduled for launch later in the year and during the holiday selling season.

As noted in EA’s Feb. 19th letter, EA’s proposal is not conditioned on any financing requirement. It is, however, subject to certain customary conditions as set forth in the letter. EA’s $26 per share proposal is based on the current equity capitalization of Take-Two. Although EA indicated in the letter that its proposal was subject to negotiations commencing by Feb. 22nd, EA intends to keep its proposal open for the present to give Take-Two’s shareholders and Board of Directors further time to consider it.
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Link has a letter that EA sent to Take Two.

#1 RC Cola, Feb 24, 2008

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wait would this mean an end to the 2k series?

crap I HATE LIVE

#2 The_Yoyo, Feb 24, 2008
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The_Yoyo said:

wait would this mean an end to the 2k series?

crap I HATE LIVE
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If that happened, I would probably hunt down the EA brass and lock them in a room with only NBA Live for entertainment for the rest of their lives. Bwahaha!

#3 Drexlerfan22, Feb 24, 2008
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the NBA 2K series is FAR AND AWAY better than the Live series. If this deal goes through, it would be wise for EA to cancel its Live series and fund the current 2K team to improve the game.

#4 clutch citizen, Feb 24, 2008
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Drexlerfan22 said:

If that happened, I would probably hunt down the EA brass and lock them in a room with only NBA Live for entertainment for the rest of their lives. Bwahaha!
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Yeah, I would kill a man.

Their best bet would be to fire the Live crew and just keep developing with the 2K crew and label it Live.

#5 Sooner423, Feb 24, 2008
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Wait, EA actually has a site dedicated to this?
http://www.eatake2.com/
FAQ:

Why does EA want to acquire Take-Two?
We have enormous respect for the creative teams at Take-Two. We think we can provide those teams with a stable creative environment, a strong publishing partner with a global and more comprehensive publishing platform that includes packaged goods, online and wireless, capital to invest in the growth of existing and new game franchises, and a team of executives that know the game industry well. Most of all, we can offer them the creative freedom to do what they do best – make great games.

Why now?
We’ve waited to ensure that our proposal did not disrupt development on GTA IV. The game is scheduled to launch in about two months, which means the core development should be essentially complete.

At the same time, the reorganization of the EA Labels is basically done and our newest studios – BioWare and Pandemic – are settling in. Under the reorganization, creative teams at EA have a new sense of freedom and responsibility. There are more brand-new titles in development today than at any time in our history.

Finally, this is a good time to align our publishing strengths to Take-Two’s game roster. A timely integration would give a big boost to Take-Two’s games that are scheduled for release later this year and for their entire catalog leading into the holidays.

How long has EA been planning to bid on Take-Two?
We have been looking at Take-Two for some time and have been in communication with them on-and-off for about a year. We opened a dialogue to discuss our intention to acquire Take-Two with the company’s management in December and followed up with a formal proposal on February 6th. We made a second proposal on February 19th.

Is this a hostile proposal?
Our proposal is friendly to Take-Two shareholders, developers, partners, and customers. We continue to seek a friendly, negotiated transaction.

Would Take-Two retain its organizational identity?
Take-Two is an organization made up of several extraordinary creative teams at R*, Visual Concepts, Irrational, Firaxis, etc. We’d expect each studio to retain its own unique identity.

Would the R* team be happy at EA?
We think so. We have great respect for the R* leadership team and some of our executives have worked with R* leaders while in previous positions with other companies. We believe EA’s decentralized label organization will be attractive to Take-Two’s creative talent.

With an even larger organization, how will you ensure the quality of the games or implement the improvements that you’ve discussed recently?
We have a very strong team and the human and financial resources to get the job done. Last year, we implemented a decentralized label organization that allows game development teams a lot of creative freedom and responsibility.

Will this interfere with the integration of BioWare and Pandemic?
No. The BioWare and Pandemic teams are working well within EA. It’s still too early to call the transition complete but these creative leaders enjoy a great deal of respect and freedom within the EA system.

Where would Take-Two roll up within EA’s new label structure?
It’s too early to discuss plans for managing and integrating the Take-Two team. What we can say is that EA’s new decentralized structure and Label-based model can give these teams the freedom and responsibility they need to continue making great games.

Do you expect to terminate any Take-Two employees?
We’re not going to begin managing a company until our proposal is accepted and the deal is done. However we have enormous respect for the creative teams at Take-Two and consider their talent to be one of the most attractive elements of this company. We really want to work with these teams.

Do you intend to kill or restrict any of the R* franchises?
We strongly believe that behind all the controversy is a core of great intellectual property and development talent. These titles don’t sell millions because they’re controversial; they sell because they’re great games. We have no plans to change that.

Would you kill 2K Sports?
Any integration starts with our respect for the teams and people that make great games. Beyond that, it’s too early to discuss plans for managing Take-Two.

Would you close Take-Two publishing?
Again, it’s too early to discuss plans for managing Take-Two.

Would you keep Take-Two’s New York headquarters?
R* is based in New York and we have no plans to change that.

What is EA going to do next?
EA has gone through a lot of dynamic change in the past year. The company is full of talented people with plans for making great games. We’re incredibly proud of our creative teams and many blockbuster franchises from EA SPORTS to EA Games, The Sims and EA Casual Entertainment. We’re excited about the recent release of Burnout Paradise and looking forward to the upcoming launch of Army of Two, Warhammer Online, Mercenaries2, Dead Space, Boom Blox, Spore and many more.
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#6 RC Cola, Feb 24, 2008
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clutch citizen said:

the NBA 2K series is FAR AND AWAY better than the Live series. If this deal goes through, it would be wise for EA to cancel its Live series and fund the current 2K team to improve the game.
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I used to be a fan of live until live 06.
2K all the way.
I agree though, ea should cancel live and continue to improve the 2k series

#7 JD2010, Feb 24, 2008

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JD2010 said:

I used to be a fan of live until live 06.
2K all the way.
I agree though, ea should cancel live and continue to improve the 2k series
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I was a Live fan, too. Since the genesis/snes era (Horry on the cover). I give Live the credit of getting me to play a basketball game that I could get into.

But it's like NBA careers. Live is the veteran player that contributed a great deal but has lost a step. 2K is the young player with an outstanding rookie season approaching the prime of his career ready to replace the veteran player.

#8 clutch citizen, Feb 24, 2008
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take 2 rejected the offer but left a window open for possible negotiations after GTAIV releases...

#9 UTweezer, Feb 24, 2008
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JD2010 said:

I used to be a fan of live until live 99'.
2K all the way.
I agree though, ea should cancel live and continue to improve the 2k series
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...Corrected it for u...

#10 Drizno, Feb 25, 2008
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Please, I hope this doesn't happen. Regardless of what EA said, if this happens, I think they will kill off 2K Sports. They use to dominate the Sports Game genre until 2k came into the picture. I'm sure they'll do anything just to be #1 again.

#11 Angkor Wat, Feb 25, 2008
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NBA Live is a terrible, terrible game.

This is the opposite of jelafied.

#12 mlwoo, Feb 25, 2008
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mlwoo said:

NBA Live is a terrible, terrible game.

This is the opposite of jelafied.
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does anyone have live 08 on ps3? its HORRIBLE compared to 2k8.
whats up with the rim looking fake.. lol
even NBA 08 is better, u can download it as a demo in the ps store

#13 JD2010, Feb 25, 2008

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I hate EA. First they purchase the rights to the NFL, which made it so that NFL 2K could not compete, even though NFL 2K was a superior product. Then they buy out 2K, which was probably done to remove the competition as opposed to competing against it. Next they will raise their prices. EA sucks!!!!!!

#14 mbiker, Feb 25, 2008
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This is really not looking good...

http://www.gamespot.com/ps3/action/grandtheftauto4/news.html?sid=6186646

Excerpt:
"Concerns about the 2K Sports brands, and the damage that the acquisition might do to competition were generally skirted. When the matter was pressed EA made it clear that it felt there was still lots of competition in the sports space, with the likes of Wii Sports, the Tony Hawk Franchise, Virtua Tennis and Hot Shots Golf likely to keep EA Sports on its toes for some time."

...does that sound to anyone else like the 2K sports games would almost certainly be scrapped? They can't really be serious about "competition" from Wii Sports and Hot Shots Golf. That's a grotesque and obvious evasion if ever I heard one.

This is like some kinda crazy bad dream for me. I game quite a bit, and I'd say a good 50% of that time is dedicated to playing the latest iteration of NBA 2K. I'm seriously gonna kill a man if NBA 2K gets scrapped.

#15 Drexlerfan22, Feb 25, 2008
Last edited: Feb 25, 2008
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Elminate the competition...That's EA's motto...

#16 rrj_gamz, Feb 25, 2008
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NBA Live FTW!

#17 bladeage, Feb 25, 2008
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knowing EA, they'll scrap NBA live and rebrand NBA 2K as "NBA 2K LIVE"

#18 UTweezer, Feb 25, 2008

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UTweezer said:

knowing EA, they'll scrap NBA live and rebrand NBA 2K as "NBA 2K LIVE"
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We can only hope.

#19 Drexlerfan22, Feb 25, 2008
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I don't care what anyone says, if they try to merge the live and 2k series, the end product will NOT be better. Competition forces the development companies to work harder, if they merge, EA will just get complacent. Screw you EA sports!

#20 ricky812, Feb 25, 2008

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