Sponsored By

Electronic Arts Surrenders Take-Two

Electronic Arts says it has decided not to make a bid to acquire Take-Two, and is terminating discussions with the company, ending over half a year's worth of attempts to buy its rival.

Leigh Alexander, Contributor

September 15, 2008

2 Min Read

Electronic Arts says it has decided not to make a bid to acquire Take-Two, and is terminating discussions with the company. The two companies had signed a non-disclosure agreement to protect their recent closed-door talks, during which EA reviewed Take-Two's management presentation and due diligence to see what per-share value it would support. Though EA had said it was "hopeful" that the two parties could reach an agreement, the company announced today that "after careful consideration... EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two." The termination of discussions appears to bring an end to half a year's worth of attempts by EA to acquire its rival, beginning with a $2 billion tender offer in February of 2008 that quickly went hostile, and underwent several extensions and an especially extensive review by the Federal Trade Commission before EA finally allowed the bid to expire last month. There are a few potential barriers that could have halted the merger on both sides. EA's original $2 billion dollar offer amounted to $26 per share, but the approval of a management compensation package by Take-Two's board relatively early in the process diluted the per-share value to $25.74, an amount chairman Strauss Zelnick repeatedly stressed was "inadequate." Take-Two's board also adopted a "poison pill" measure that would have taken effect in the event the company was acquired, and the measure was never voted down or removed throughout the long-standing acquisition attempt. For its part, EA had always stressed the time-sensitivity of its offer, stating that any potential combination needed to take place within a time window that would allow EA to reap benefits from the merger over the key fall and Holiday season. Alongside the official announcement that the talks had terminated, EA CEO John Riccitiello commented, "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 Sports titles on this generation of consoles. We're also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online."

About the Author(s)

Leigh Alexander


Leigh Alexander is Editor At Large for Gamasutra and the site's former News Director. Her work has appeared in the Los Angeles Times, Variety, Slate, Paste, Kill Screen, GamePro and numerous other publications. She also blogs regularly about gaming and internet culture at her Sexy Videogameland site. [NOTE: Edited 10/02/2014, this feature-linked bio was outdated.]

Daily news, dev blogs, and stories from Game Developer straight to your inbox

You May Also Like