Electronic Arts will let Take-Two offer expire today
Electronic Arts Inc. will let its offer to buy Take-Two Interactive Software Inc. expire tonight because the companies won't be able to merge in time for the holidays.
Missing the holiday shopping season forces Electronic Arts to reevaluate its $25.74-a-share bid, Chief Executive John Riccitiello said in a letter today to Take-Two Chairman Strauss Zelnick. New York-based Take-Two had rejected the offer saying it undervalued the company.
Electronic Arts, the world's second-largest video-game maker, and Take-Two spoke over the weekend, Redwood City, Calif.-based Electronic Arts said today. In a separate statement, Take-Two, maker of the "Grand Theft Auto IV" games, said it would provide company details to Electronic Arts that aren't available to the public to move the talks forward.
"Our board remains unwavering in its belief that EA's unsolicited conditional tender offer of $25.74 per share was inadequate," Take-Two said in the statement. The company will demonstrate "significant strides" made since Electronic Arts last reviewed the business in early 2007, Take-Two said.
Take Two fell $1.09, or 4.4 percent, to $23.75 in morning. The shares had gained 35 percent this year before today. Electronic Arts, down 17 percent this year, fell 40 cents to $47.84.
Take Two will give Electronic Arts information including a three-year product release schedule and financial estimates, Zelnick said in a letter to Riccitiello. The company will "act quickly," he said. Shares of Take-Two have traded below the bid since June 27.
The Federal Trade Commission also is scheduled to complete an antitrust review of the proposed offer this week, Electronic Arts said today. The company had previously extended its tender offer five times to let regulators complete their review.
Zelnick said last month the company was reviewing options related to the offer, "chief among them to remain independent." The company in June reported its first quarterly profit in more than two years, helped by the April 29 release of "Grand Theft Auto IV."
The "Grand Theft Auto" games are among the top-selling titles. Consumers purchased 8.5 million copies of "Grand Theft Auto IV" through the end of May, the company said in June.
Other Take-Two games include the science-fiction title "BioShock" and the "Sid Meier's Civilization" series.
