Grand Theft Auto maker rejects $2bn bid
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Your support makes all the difference.Two of the world's most famous video games developers were last night in a tense stand-off over a potential merger deal that would bring the Grand Theft Auto series under the same roof as The Sims and Fifa soccer titles.
Take-Two Interactive, whose delayed Grand Theft Auto IV is set for release in the spring, rejected a $2bn (£1bn) offer from larger rival Electronic Arts (EA), calling it inadequate, but investors were betting that the company will succumb to a takeover at a slightly higher price.
Take-Two shares leapt by more than 50 per cent and were trading at $26.55 yesterday lunchtime, above the $26-a-share cash bid EA which the company had rejected in private last week. Late on Sunday, EA publicly revealed its offer so that it could appeal directly to Take-Two shareholders and put pressure on the board to perform a U-turn.
"It is our objective to make this a friendly deal," EA's chief financial officer, Warren Jenson, said on a conference call with Wall Street analysts yesterday. "Our next steps, we would love to sit down with Take-Two management and the board of directors and complete a transaction."
EA is trying to bolster its portfolio of blockbuster games in the face of a consolidating video games industry. Vivendi Games, its rival which owns World of Warcraft, is in the throes of merging its gaming business with Activision, makers of Guitar Hero.
Brent Thill, analyst at Citigroup, said: "We believe EA views Take-Two as a strategic asset and may be willing to pay slightly, but not materially, higher than its current offer. The industry is entering the heart of the console cycle and Electronic Arts can more profitably participate in expected strong industry growth by increasing its percentage of revenue from owned intellectual property, with the addition of franchises such as Grand Theft Auto and BioShock."
Take-Two said it was opposed to a sale so close to the launch of a major new title, which could be 2008's best-selling game. Grand Theft Auto IV is expected to sell 10 million copies in its first year.
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