(AFP) – Jun 17, 2008
SAN FRANCISCO (AFP) — The world's largest videogame company is continuing its quest to buy "Grant Theft Auto" publisher Take-Two Interactive Software despite repeated rejection of a two-billion-dollar offer.
Electronic Arts on Tuesday added a month to a June 16 deadline for buying Take-Two stock directly from shareholders but remained firm on its bid of 25.74 dollars per share.
California-based EA said it is postponing the deadline, which had previously been extended, to allow US regulators time to clear the proposed acquisition.
Take-Two's board of directors has snubbed the offer and called upon shareholders to do the same, saying the bid undervalues the firm and its hot videogame properties that include "Grand Theft Auto" and "Bioshock."
"Our board of directors remains in unanimous agreement that the proposal is contrary to the best interests of Take-Two stockholders," Take-Two board chairman Ben Zelnick said in a release.
"The latest extension of EA's unsolicited, highly conditional tender offer does not alter the fact that their proposal still significantly undervalues Take-Two."
Take-Two's board had refused to discuss a takeover with EA prior to the April 29 launch of "Grand Theft Auto IV: Liberty City Stories," which tallied a record-breaking 500 million dollars in sales in its first week.
The "GTA" franchise is as controversial as it is popular because of its violence. Players score points with acts such as carjacking and killing prostitutes or police officers.
Analysts credit "GTA: IV" with causing US video game software sales to surge to 1.23 billion dollars in April as compared to 839 million dollars during the same month a year earlier.
"We congratulate Rockstar on the successful launch of GTA IV but believe our offer reflects a full and fair price based on the long-term value of Take-Two's entire operation," EA senior vice president Owen Mahoney said in a release.
"Our offer price remains unchanged at 25.74 dollars per share, which is a substantial premium to where Take-Two's stock was trading prior to our offer."
EA initially offered in February to pay 26 dollars per share, a 50 percent premium above the Take-Two stock price at that time, but trimmed the bid after changes in compensation for Take-Two executives hiked the cost of a takeover.
Take-Two's stock was trading at slightly more than 26 dollars per share on Tuesday.
EA reports that 7.9 percent of Take-Two stockholders have offered their shares for purchase by the videogame giant.
Zelnick refers to the figure as evidence shareholders agree the offer is too low, but EA counters that the percentage is meaningless because most stockholders won't decide until regulators clear a takeover of Take-Two.
"The board remains focused on the strategic process that began formally on April 30 to consider all alternatives to maximize value," Zelnick said.
"We believe that these alternatives, which may include a business combination or remaining independent, will deliver greater value to stockholders than the current EA offer."
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