Shares of Take-Two tumbled this morning as the market opened to news that Electronic Arts had decided not to pursue
its acquisition of the company.
EA offered to buy Take-Two for $2 billion, or $25.74 a share, in February 2008. Throughout the months that followed, on strong sales of Grand Theft Auto IV
and alongside a management turnaround well in progress, the publisher's shares stayed level in the $24-$26 range, at times approaching the area of $27 -- but as of press time today, the per-share value of Take-Two is currently at $17, a low it hasn't seen since before EA's initial offer.
It's a loss of over $4.50 per share in today's trading for Take-Two, who had maintained its solid share value in the summer had more to do with the release of GTA IV
, the resolution of all its outstanding debt, and investor confidence in its future outlook -- and less to do with EA's bid.
Analysts had maintained, however, that the majority of Take-Two stockholders were arbitrageurs eager to see the company reach an agreement with EA. The return of the publisher's per-share value to one approximate to what it was prior to EA's interest seems to bear out this viewpoint.
EA's shares were also down by about one percent to $44.08 per share. The market in general opened to anxiety today as investors speculated on the bankruptcy of Lehman Bros. and the acquisition of Merrill Lynch by Bank of America.