Electronic Arts Inc. on Sunday launched a $2-billion takeover bid for troubled video game publisher Take-Two Interactive Software Inc., stepping up the industry's torrid pace of consolidation.
EA disclosed that Take-Two, the New York-based publisher of the "Grand Theft Auto" series, had recently rejected two all-cash buyout offers. EA, the world's largest game publisher, made the higher bid public Sunday and said it would bring the offer directly to Take-Two's shareholders.
The offer of $26 a share for Take-Two represents a nearly 50% premium over Friday's closing price and a 64% premium over the closing price when it was made Feb. 19.
Take-Two Executive Chairman Strauss Zelnick called the deal "insufficient" and said his company would be willing to discuss a deal only after the release of "Grand Theft Auto IV," scheduled for April 29.
The move follows a series of high-profile mergers in the game industry. Flush with cash from record sales, publishers are seeking both cost savings and a broad portfolio of franchises to protect themselves from flops in the increasingly hit-driven industry.
Santa Monica-based Activision Inc. is set to close a merger with Vivendi's game business this year. The combined company, Activision Blizzard, is expected to have market value of $18.1 billion.
Redwood City, Calif.-based EA in October agreed to pay as much as $775 million in cash and stock to acquire two game developers, Pandemic Studios and BioWare Corp.
The bold Take-Two bid is part of EA Chief Executive John Riccitiello's plan to overhaul his company, whose popular series include "Madden Football," "The Sims" and "Need for Speed."
"There's no other company in a position to make a similar offer, which means the deal is very likely going to happen," said Michael Pachter, an analyst with Wedbush Morgan Securities.
Riccitiello, who assumed the helm of EA almost exactly a year ago, vowed to shake up the publisher, which had been losing market share to rivals such as Activision. He tore down the company's centralized development style and created more independent labels that focus on specific genres, similar to the music industry. And he has moved quickly to fill gaps in EA's game portfolio, such as the role-playing games for which BioWare is known.
