With all the back and forth over the last five months, keeping track of Electronic Art’s attempt to acquire Take Two has gotten confusing. At times, it seems like just about anyone you ask is bound to have a different take, or different facts to relay: "The offer is too low and undervalues the company." "It’s just a matter of time." "EA will have to up their offer to $28 to $30." "it’s a stalemate."
In March, we put together a "Deal Diary" to track things. That first effort rapidly became outdated with all the twists and turns. An update was long overdue, so here, covering all the gritty details, even historical stock prices, is the remake. All in one place: The Exhaustive EA and Take Two Deal Diary from Metue.com.
[Note: This Deal Diary will be updated when more news develops. This version was last updated September 14, 2008. For related articles and analysis about the merger please see the links at the end of this Deal Diary].
| • EA Privately Offers $25 a Share |
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In a letter to Stauss Zelnick, John Riccitiello writes, "this letter is to formally express Electronic Arts Inc’s. (“EA”) interest in acquiring Take-Two Interactive Software, Inc. (“Take-Two”) and to propose a transaction in which EA would acquire all of the outstanding shares of Take-Two common stock for $25 per share payable in cash." The offer represents a 58% premium over the recent stock closing price and a 51% premium over the 30 day trailing average.
| •Take Two Management’s Agreement Extended |
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Take Two’s board agreed on February 15th to increase Zelnick Media’s management fees and bonus structure. They also agreed to fortify the change of control provisions that provide payout in the event the company is acquired.
| •Take Two Rejects Initial Private Offer |
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In a letter sent to EA CEO John Riccitielo, TTWO Chairman Strauss Zelnick rejects EA’s private offer to buy the company at a price of $25 a share. He writes, "As part of the Board’s stated objective of maximizing shareholder value, we have been and remain open to considering a business combination with interested parties at the right time and the right price. However, the Board has concluded that EA’s proposal has not been delivered at a time nor does it contemplate a price which is consistent with this objective."
| •Historical Stock Price Data |
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As of the market close on this day, Take Two stock is at $15.83 a share. EA stock is trading at $48.72
| •EA Privately Increases Offer to $26/share |
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Continuing a private dialogue between CEO’s, EA’s John Riccitiello replies to Strauss Zelnick’s prior rejection of EA’s advances and sweetens EA’s bid. He writes, "Dear Strauss: Thank you for your letter of February 15, 2008. While I appreciate its courteous tone and value our ongoing dialogue, I am disappointed that you have rejected Electronic Arts Inc.’s (“EA’s”) $25 per share cash offer to acquire Take-Two Interactive Software, Inc. (“Take-Two”) and declined to engage in the friendly negotiations we proposed. We continue to believe that an acquisition of Take-Two by EA is in the best interests of your shareholders, employees and other constituents, and we remain interested in acquiring Take-Two. So, to further demonstrate our seriousness and encourage you to move forward now, I am writing to increase EA’s offer to acquire all of the outstanding shares of Take-Two to $26 per share in cash.
This offer is subject to Take-Two agreeing by February 22, 2008 to commence negotiation of a definitive merger agreement and to permit EA to commence a limited due diligence review of Take-Two.
Our revised all-cash offer represents a 64% premium over Take-Two’s most recent closing price and a 63% premium over Take-Two’s 30-day trailing average price (based on prices as of market close on Friday, February 15th)."
The letter, available here in PDF, also threatens an escalation saying "Our strong preference is to conduct a private negotiation. If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two’s shareholders.
Strauss Zelnick replies to John Riccitiello by letter reiterating Take Two’s prior position – not interested now, but willing to talk and even offer "quiet period" before discussing the prospect of a merger with other parties.
He writes, "As you know, the Board of Directors (the “Board”) of Take-Two Interactive Software, Inc. (“Take-Two” or the “Company”) carefully considered Electronic Arts Inc.’s (“EA’s”) previous offer of $25 per share and concluded that neither the timing of the proposed acquisition nor the price was consistent with the Board’s objective of maximizing stockholder value. The Board’s rationale for rejecting EA’s prior offer is not altered by your decision to increase that offer by four percent. I would like to reiterate, in the clearest possible terms, the Board’s conviction that this is not the right time for Take-Two to enter into a negotiation to sell the Company.
Our organization is keenly focused on the scheduled April 29th launch of Grand Theft Auto IV, and on maximizing the value of the game to the Company and, in turn, our stockholders. It is the Board’s strongly held view that beginning strategic discussions now would distract our Company and thereby threaten the value of this key franchise. While I understand that you may disagree with the Board’s reluctance to commence discussions immediately, the Board and I want to assure you that our concerns about timing are genuine. Potential negative financial consequences to Take-Two are significant and we believe outweigh the benefits of commencing discussions at this time.
As you know, there is no certainty that EA will actually close on the proposed transaction on mutually agreeable terms, especially since you have proposed a price that we would not accept and have qualified your offer by a diligence request. Moreover, as we have all seen time and again, the process surrounding acquiring a public company from start to finish is complex, uncertain, intrusive and distracting, and we believe it would be especially so to the creative artists at the core of our business and to all those who may be displaced by a transaction.
While the Board is convinced that discussions at this time would be imprudent, we also appreciate the potential benefit of a frank and private dialogue with EA. To that end, the Board would be willing to commit to entering into a good-faith discussion with EA on April 30, 2008 to determine if we can reach common ground on the proper value of the Company and therefore an appropriate, mutually beneficial transaction. In order to alleviate any concerns you may have about the proposed starting date for these discussions, I would be pleased to meet with you privately as soon as possible to talk on a general basis. In addition our Board would confirm, subject to its fiduciary duties, that from now until April 30, 2008 (the “Quiet Period”), the Company will not pursue negotiations with any other potential strategic partner for a business combination unless we have first contacted you."
| •Historical Stock Price Data |
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As of the market close on this day, Take Two stock is at $17.36 a share. EA stock is trading at $49.74
| •EA Goes Public with Offer |
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Making good on the prior threat, EA goes public with their offer. An "Open Letter from John Riccitiello" is released to the press. He writes, "I’m pleased to announce that EA has made a proposal to acquire Take-Two. We’ve issued a press release that explains why the deal is attractive for the shareholders of both Take-Two and EA. Now I want to share some perspective on why it would be good for the people who make Take-Two’s games and, just as important, the people who play them."
| •Take Two Rejects the Offer |
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Take Two responds to EA’s offer with a formal press release and defense. The company claims the offer is inadequate and opportunistic. They suggest entering discussions on April 30th, after the debut of Grand Theft Auto IV.
The full text of the rejection is available here in PDF.
Bear Stearns and Lehman Brothers are acting as financial advisors to Take-Two and Proskauer Rose LLP is acting as a legal advisor.
| •EA Holds Conference Calls: Sells Offer Logic |
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To discuss the offer, EA holds a conference call. Click here to download conference call script
A website is also launched to support the takeover.
| •Historical Stock Price Data |
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As of the market close on this day, the first day of trading after the offer has been made public, Take Two stock jumps to $26.89 a share, well ahead of the the offer price – a sign the market expects a higher second offer will come. EA stock is trading down slightly at $47.14.
| •Take Two Adopts Severance Plan |
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On March 3, 2008, the Compensation Committee of the Board of Directors of Take-Two Interactive Software, Inc. adopt the Take-Two Interactive Software, Inc. Change in Control Employee Severance Plan (the“Plan”). More info in the SEC Filing here
| •Class Action Suit Filed Against Take Two |
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Prickett, Jones and Elliot filed a class action suit in Delaware on behalf of Take Two shareholder Patrick Solomon. The complaint alleges Take Two executives failed to complete their fiduciary duties to the shareholders when they chose to neither discuss the original EA offers (EA made these offers in Private before going public with an increased bid) nor negotiate.
| •FMR Sells Take Two Holdings |
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FMR, the parent company of Fidelity Mutual Funds, and the second largest shareholder, sells off 16 percent of their holdings in Take Two.
| •Oppenheimer Sells Take Two Holdings |
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Oppenheimer Funds, Take Two’s largest shareholder, cut their stake in half, slimming down from a 23% stake to just 11.5 percent (8.8m shares).
| •Take Two Releases Q1 Earnings |
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For the quarter ended January 31st the company posted a loss of $38m(52c/share) versus a loss of $21.5m (30c/share) last year. (Less option expenses and legal fees they lost 41c/share).
Revenue was off 13% year over year to $240.4m ($277.3m last year). Consensus analyst expectations (Thompson) had called for a loss of 51 cents a share on sales of $211.7m (less one time charges). The company had guided for losses in the range of 50 cents to 60 cents a share on sales of $175 to$225m.
On a positive note, forward guidance is raised: For the fiscal year ending in October they’re forecasting a range a$1.35 to $1.55 a share from sales of $1.25 to $1.4b. For Q2, with the bulk of the result coming from the game’s release, they’re expecting a range of $1 to $1.10 a share on sales of $450 to $500.
| •Offer Escalates to Hostile Takeover |
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The deal officially escalates to hostile March 13th with EA taking its tender offer to Take Two’s shareholders.
The move will also put management’s pay in the crosshairs.In the tender offer documents filed with the SEC today (Summary Term Sheet is here),EA added an aggressive price reduction trigger to their offer. Now, in the event that the new management agreement terms are approved, EA will reduce their offer to $25.74 net per share (that is a reduction equal to the payment Zelnnick Media will get if their shares are vested).
Take Two responds asking shareholders to take no action and allow the board to consider the offer for 10 days.
| •Historical Stock Price Data |
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As of the market close a day following the escalation to Hostile Takeover, , Take Two stock is at $25.29 a share, just under the offer price. EA stock is trading down slightly at $46.91
The Board of Directors of Take-Two Interactive Software, Inc. unanimously determined on March 20, 2008 that the cash offer is inadequate in multiple respects and contrary to the best interests of Take-Two’s stockholders. Accordingly, the Board recommends that stockholders not tender any of their shares to EA. The basis for the Board’s unanimous decision is set forth in Take-Two’s Solicitation/Recommendation Statement on Schedule 14D-9 that it filed with the Securities and Exchange Commission on March 26, 2008.
| •Take Two Adopts "Poison Pill" |
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On March 24, 2008, the Board of Directors of Take-Two Interactive Software, Inc. (“Take-Two” or the “Company”)adopted a stockholders rights plan (or "Poison Pill"). The plan declared a distribution of one right (a “Right”)for each outstanding share of common stock, par value $0.01 per share (the “Common Stock”), to stockholders of record at the close of business on April 7,2008 . Each Right entitles the registered holder,subject to the terms of the Rights Agreement to purchase from the Company one one-thousandth of a share (a “Unit”) of Series BP referred Stock, par value $0.01 per share at a price of $42.50 per Unit, subject to adjustment (the “Purchase Price”).
| •EA CFO Warren Jenson Leaves |
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Surprising many given the on-going takeover attempt, EA CFO Warren Jenson announces he will be leaving the company. There is some speculation that Jenson’s departure is the result of differing opinions on acquisition strategy or the broader long term strategy for the company. More, it seems, believe the move is simply part an executive shakeup begin when John Riccitiello retook control of the company. They suspect a new candidate is waiting in the wings and the move will have no impact.
Having reviewed and met to discuss the offer, Take Two’s board issues a press release announcing they are opposing the offer. The basis for the Board’s unanimous decision is set forth in Take-Two’s Schedule 14D-9 filed today with the Securities and Exchange Commission. A presentation justifying their position is also posted on the companies taketwovalue.com website. Take Two also announces several defensive measures:
• Adopted a stockholders rights agreement and a Certificate of Designation for a new class of Series B Preferred Stock. The rights agreement will be outstanding for 180 days
• Changed the date and time of the 2008 Annual Meeting to Thursday, April 17, 2008 at 6:30 p.m. (New York City time)
• Amended Bylaws to provide for a new extended period of time for stockholders to nominate persons for election to the Board and propose business to be considered at the 2008 Annual Meeting
| •EA Names Eric Brown New CFO |
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With an ongoing hostile takeover, when the news flashed that Electronic Arts was jettisoning existing CFO Warren Jenson, it was likely that even with no successor named, one was ready and a few dotted “I’s” and crossed “T’s” from being announced. Now it’s official. Brown, a prior colleague of Riccitiello, will join the company starting April 14th.
The first tender offer is scheduled to expire at 12:00 midnight, New York City time, on Friday, April 11, 2008, unless the tender offer is extended. The offer is conditioned on a number of terms:
(1) EA being able to acquire a majority of the outstanding shares (fully-diluted) of Take-Two in the tender offer;
(2) the anti-takeover provisions of Section 203 of the Delaware General Corporation Law not being applied to the tender offer or any subsequent merger with EA;
(3) the expiration or termination of any applicable Hart-Scott-Rodino waiting period and;
(4) Take-Two entering into a merger agreement on terms satisfactory to EA in its reasonable judgment. Morgan Stanley & Co. is acting as the Dealer Manager for the tender offer and Georgeson Inc. is acting as Information Agent for the tender offer.
| •Historical Stock Price Data |
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Take Two stock is at $25.73 a share, just under the offer price. EA stock is trading up at $50.88
At the company’s annual meeting Take-Two’s Board of Directors was re-elected and stockholders approved a proposal to amend the Company’s Incentive Stock Plan.
| •FTC Seeks More Anti-Trust Info |
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Electronic Arts Inc. (“EA”) (NASDAQ: ERTS) today announced that it received a second request for information from the U.S. Federal Trade Commission (“FTC”) regarding its proposed acquisition of Take-Two Interactive Software, Inc.
| •Tender Offer Extended, Price Dropped |
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With the annual meeting concluded, and shareholders voting to approve management compensation packages, EA makes good on their ultimatum and reduces the offer price to account for the added shareholdings. The new offer price is $25.74 a share.
Today, EA also extends the tender offer to May 16th, 2008. The offer had been set to expire April 18th at 11.59pm, EDT
As of 5:00 p.m., EDT, on April 17, 2008, 6,432,787 shares of Take-Two had been tendered in and not withdrawn from the tender offer.
| •Take Two Responds To Extension and Price Reduction |
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6,432,787 of Take-Two’s outstanding shares, or approximately 8.3% of the total, tendered into EA’s offer as of 5:00 p.m. Eastern time on April 17, 2008.
Take Two responds to EA’s Extension in a press release:
“The minuscule number of shares tendered, as well as the strong vote in favor of the proposals presented at our annual meeting, offer indisputable evidence that our stockholders regard our efforts to enhance Take-Two’s stockholder value as superior to the EA offer,” said Strauss Zelnick, Chairman of the Board of Take-Two. “This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our Board of Directors thoroughly reviewed and unanimously determined to be inadequate and contrary to the best interests of Take-Two’s stockholders. Take-Two’s Board of Directors has maintained from the beginning, and continues to believe, that EA’s proposal undervalues our Company. It undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74.”
| •Take Two Sets Release Dates for Midnight Club:LA Racing Game |
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Take Two’s Rockstar Games label announces the fourth installment of popular Midnight Club street racing franchise will release on September 9th in North America and September 12th in Europe.
| •Grand Theft Auto IV Goes on Sale |
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After several delays, much anticipated title GTA IV hits retailers. With the game’s retail performance expected to be outstanding, some question whether EA’s will have to increase their bid, or if their projections accounted for blockbuster sales.
| •First Retail Data on GTA IV Sales |
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Take Two knew they were going to have a hit on their hands with their new game. The strength of the Grand Theft Auto brand, and increased market expectations caused by development delays, insured it. The expectation was already set for a record breaker. The question was –by how much would the bar be raised? Wednesday, the first hard data arrived. The game is big. $500 million big according to Take Two. In the first week on the market, 6 million copies were sold worldwide at an average price of $83 a game. (International pricing is higher in many markets than the US $59.99 price). Those results represent an unquestionable success both by gaming, or general entertainment standards. They’re measurement of a blockbuster.
The question is – did analysts and EA’s own forecasts account for this? Some think so. By the numbers, and using previous best seller Halo 3 as a forecast tool appears to allow for reasonably accurate projections. Others, however, think this will justify a more substantial offer.
| •Take Two’s Bioshock Goes to Hollywood |
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Take Two’s 2K Games label announces its reached an agreement for its most recent hit title, Bioshock, to be made into a film by Universal Pictures.
Gore Verbinski, director of Pirates of the Caribbean, will direct and produce the film.
Take Two takes the opportunity to note BioShock has sold more than 2 million units worldwide since its release in August 2007. A sequel to the game, BioShock 2, is planned for a release in 2009.
Strauss Zelnick says, ""Our ability to attract a major studio and unparalleled creative team speaks volumes about the strength of our BioShock franchise. It also demonstrates how Take-Two is delivering value based on our strategy of creating and owning our industry’s most powerful intellectual property."
| •Historical Stock Price Data |
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Take Two stock is at $26.59 a share, ahead of the offer price. EA stock is at $54.57 leading into earnings news.
| •EA Releases Q4 and Year End Earnings |
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“A year ago, we committed to an aggressive change agenda,” Riccitiello says “our employees stepped up to the challenge.”
For the quarter ended March 31st – partly due to onetime charges, the game publisher recorded a quarterlyloss of $94m. The good news, on an adjusted basis, they earned $30m (9cents a share), up from $19m last year. The results were good enough to surpass analyst consensus expectations.
For the year, revenue was $3.665b, up 19% year over year.
In titles, 15 titles sold more than 2million copies on the year. 27 more than 1 million. In Q4, Army of Two sold more than 1.8m copies. Burnout Paradise sold 1.5m. Rock Band sold 1.5m and FiFA Street 3 moved 800k copies.
The full report from Metue.com is here. The corporate press release (PDF) here.
The tender offer is set to expire at 11:59 p.m., New York City time, on May 16, 2008 unless extended.
As of 5:00 p.m., New York City time, on Friday, May 16, 2008,approximately 6,210,261 shares of Take-Two had been tendered in and not withdrawn from the tender offer.
Electronic Arts Inc. announces today that it has extended its tender offer for Take-Two Interactive Stock 11:59 p.m., New York City time, on Monday, June 16,2008, unless further extended. The tender offer was previously set toexpire at 11:59 p.m., New York City time, on May 16, 2008.
From the Press Release: "Extending our offer will allow the FTC review process to continue,"said Owen Mahoney, Senior Vice President of EA Corporate Development."EA’s offer price remains unchanged at $25.74 per share and our offer is still subject to conditions that include regulatory approval. As stated earlier, we retain the right to terminate the offer if the conditions are not satisfied."
As of 5:00 p.m., New York City time, on Friday, May 16, 2008,approximately 6,210,261 shares of Take-Two had been tendered in and not withdrawn from the tender offer.
| •Take Two Responds to Extension |
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Using similar language, Take Two issues a statement.
Strauss Zelnick, Chairman of the Board of Take-Two, commented, "This isthe same highly conditional proposal that EA offered Take-Twostockholders on March 13, 2008, which our Board of Directors thoroughlyreviewed and unanimously determined to be inadequate and contrary tothe best interests of Take-Two’s stockholders. As such, therecommendation of our Board of Directors that stockholders not tendertheir shares to EA remains unchanged."
| •EA Insider Stock Purchases |
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EA CEO John Riccitiello purchases 20,000 shares of EA stock. The purchase suggests a probable likelihood that no talks are privately being held between the companies.
Explanatory Note: SEC insider trading regulations prevent certain executive "Insiders" from buying and selling stock under certain circumstances. Subject to these regulations, purchases/sales are often limited to certain preset "windows" and also require that they have no "material non public information." Any private discussions between Take Two and EA would likely constitute such "material information."
For Riccitiello to buy there would have to either 1) be no discussion going on, or 2) his purchases would have been to made by as part of a preset regular investment schedule or through an investment manager who has the power of attorney to invest on his behalf without direct consultation over when, or what, to buy and sell.
| •EA Acquires Hands-On Mobile Korea |
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Electronic Arts Inc. announces that it has agreed to acquire the assets of Hands-On Mobile Korea, a leading Korean mobile developer and publisher, best known for its mobile role-playing game, Heroes Lore.
"This acquisition is a major milestone in growing our mobile business in Asia," said Barry Cottle, Senior Vice President and General Manager EA Mobile. "Hands-On Mobile Korea brings us a great leadership team, proven studio talent, and outstanding carrier and OEM handset manufacturer relationships."
Related to the Take Two deal, the acquisition is immaterial but signals EA has multiple elements in their broader acquisition and growth plans.
| •EA Insider Stock Purchases |
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EA Director Tim Mott exercises options to purchase EA Shares. As noted with CEO John Riccitiello’s similar purchases a few days earlier, the transactions by "Restricted" "Insiders" hints that no discussion is currently ongoing unless these were part of "scheduled" stock transactions.
| •EA Volunteers "Quiet Period" for FTC |
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With the FTC’s antitrust investigation looming, EA volunteers to delay their pursuit for 45 days in order to allow the investigation to be concluded. If implemented, this will carry the Tender Offer to a new July 18th deadline.
| •EA Confirms Purchase of ThreeSF |
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Showing Take Two isn’t the only deal in EA’s pipeline, the company announces the comparatively tiny acquisition of ThreeSF, operators of a small social network for gaming called Rupture.
Relative to the Take Two offer, in scale and scope the deal is immaterial.
| •FTC Seeks Judicial Assistance in Investigation |
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The FTC, seeking documents from Take Two to assist in their investigation of whether a deal would violate anti-trust laws, files an "emergency petition" to ask the Court to force Take Two to comply. Take Two is claiming the full document requests are an unfair financial burden. They have already provided substantial materials, they say.
| •Take Two Releases Q2 Earnings |
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Results are provided for the quarter ended April 30, 2008. They include the first two days of sales for GTA IV.
Take Two says "The title surpassed all-time entertainment records for day one and week one sales, with approximately 6 million units sold through globally in the first week at an estimated retail value of more than $500 million. As of May 31, 2008, over 11 million units have been sold in to retailers and approximately 8.5 million units have been sold through to consumers."
Full press release on the earnings results is here.
| •May NPD Retail Data Begins to Detail GTA IV Sales |
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Every month NPD releases retail sales data for gaming sales in North America. The latest result, which provides the first full month data on GTA IV, comes out. It is the first data to give a factual backstop to bounce pre-sale projections against.
Full NPD Coverage Here.
| •EA Sued Over Football Games |
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Gamers in California and D.C. sue EA in a class action suit alleging "anti competitive conduct" over how EA sells its football games.
The suit notes that when there was competition between EA and Take Two for the football niche, EA cut its prices for its title "Madden 2005" from 49.95 to $29.95. Then, after subsequently signed exclusive agreements with the NFL, the Arena Football League and NCAA Football, agreements that essentially created a licensing monopoly, prices were raised by 70%.
The suit doesn’t have any direct impact on the Takeover Offer but its notable given the FTC’s particular interest in how a combination of EA Sports and Take Two’s 2K Sports brands could effect the marketplace.
Also, discovery from the case could produce materials that impact the takeover.
| •Historical Stock Price Data |
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Take Two stock is at $26.47 a share, ahead of the offer price. EA stock is at $46.99.
Electronic Arts’ Tender Offer set to expire unless renewed.
As of 5:00 p.m., New York City time, on Monday, June 16, 2008,approximately 6,139,824 shares of Take-Two had been tendered in and not withdrawn from the tender offer.
Electronic Arts Inc. announces today that it has extended its tender offer for all of the currently outstanding shares of common stock of Take-Two Interactive Software Inc. to 11:59 p.m., New York City time, on July 18, 2008, unless further extended. The tender offer was previously set to expire at11:59 p.m., New York City time, on June 16, 2008
| •Take Two and FTC Reach Agreement over Investigation and Documents |
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Take Two and the FTC reach an agreement to resolve issues over the Commissions "Emergency Petition" from June 5th. The deal renders the need for a Court hearing June 24th moot. July 8th is reserved in the event any other disputes arise.
| •FTC Court Date: IF NEEDED |
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The date is reserved on the US District Courts schedule in the event that any additional disputes come up regarding the FTC’s document requests.
| •EA in Compliance with FTC |
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EA announced they are in compliance with the FTC’s information requests. They also announced they’d agreed to remain inactive and not move ahead with the takeover offer until the completion fo the FTC review on August 21st.
The Offer to Purchase for Cash All Currently Outstanding Shares of Common Stock of Take-Two Interactive Software, Inc. at $25.74 Net Per Share by EA08 Acquisition Corp., a wholly-owned subsidiary of Electronic Arts Inc.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON July 18th, 2008, UNLESS THE OFFER IS EXTENDED.
NOTE: The date will likely be extended until August 21st to correspond to the termination fo the FTC’s antitrust review.
Subsequent to another extension, the deadline was reset to August 18th.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON August 18th, 2008, UNLESS THE OFFER IS EXTENDED.
| •Offer Expires, Companies Talking. Hostilities appear over. |
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Resulting from letters exchanged between the two companies’ CEO’s (copied here in full), EA announces they will let the offer expire. Take Two, in turn, will include EA in their discussions about “Strategic Alternatives.” As part of that dialogue, Take Two will provide EA with a formal presentation that includes non public product pipeline and financial projections.
The two companies talking amicably opens the door to the prospect of a possible friendly acquisition. (Full Metue review of the events is here)
| •FTC Completion and probable Tender Offer Final Deadline |
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The FTC is set to complete their review as of August 21st. EA has agreed to not proceed with the offer until this date making August 21st the likely final deadline (should they continue to extend it)
Subject to the August 18th agreements by the company, this stands primarily as a opportunity to "fast track" a deal if one is reached.
UPDATE 8/19: The FTC has officially closed their review. In a letter to EA’s counsel (PDF link), they wrote:
The Federal Trade Commission’s Bureau of Competition has conducted a non-publici nvestigation to determine whether the acquisition by Electronic Arts Inc. of Take-Two Interactive Software, Inc. may violate Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.
Upon further review of this matter, it now appears that no additional action by the Commission is warranted at this time. Accordingly, the investigation has been closed. This action is not to be construed as a determination that a violation may not have occurred, just as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves the right to take further action as the public interest may require.
| •Confidentialty Agreement Signed |
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The two companies signed confidentiality agreements to facilitate direct discussion, including the presentation of non public financial and management projections. Per the announcements, the companies intend to stick to a quiet period and make no further press announcements until either a deal is reached or they agree to part ways.
| •Companies Part Ways – Merger Talks End |
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EA announced today that they had failed to reach an agreement and were walking away from discussions with Take Two. While the prospect of a renewed Tender Offer is possible, as is a renewed dialogu, at this point, the liklihood is the merger/acquisition effort is over – at least for the remainder of 2008.
And with that , that’s it for now. This Metue Deal Diary will be updated if and when more news develops. For related articles on the merger please see the following links.
[Deal Diary Last Updated: Sept 14, 2008]
Related Articles from Metue
•The Companies Talk: Hostile Deal Over?
•GTA IV Sales Stellar But Not Enough to Back EA off?
•EA and Take Two: Inside the Deal
•EA and Take Two: Deal Diary (Version 1)
•Gloves Come Off: TK2 acquisition gets Hostile, EA hits managements wallets
•EA Makes $2 Billion Bid for Take Two
•May NPD Sales: Video Game Still Powered On
•Jury Pool: Gibson vs Guitar Hero et all. You Decide the Case
•Spielberg and Katzenberg: Gaming Connection
