Electronic Arts' takeover of DICE on ice

[UPDATE] Digital Illusions stockholders balk at EA's buyout offer; deal that was to close December 27 now in limbo.

Two days after gaming giant Electronic Arts spent a bundle on obtaining an exclusive National Football League license, its attempts to acquire Sweden-based Digital Illusions CE are proving that money can't buy everything. According to reports in the business press, EA's proposed buyout of the Battlefield 1942 developer has hit a snag.

Currently, EA owns 19 percent of DICE, with warrants to purchase more of the company. The buyout was intended to fully integrate the developer into the publisher's studio empire. But despite the DICE board of directors' approval of the integration and recommendation that stockholders agree to the deal, two factions of stockholders, one owning 16 percent and the other owning 12 percent, are reportedly voting against the merger. Ninety percent stockholder approval is needed to approve the deal.

"The tender offer is now complete and the results are now being tabulated," Electronic Arts vice president of corporate communications Jeff Brown told GameSpot. "Unfortunately, we have nothing to say until all the shares have been counted."

According to reports, both holdout groups feel the offer from EA does not take into account projected earnings stemming from two new titles due out in 2005. Those titles would be Battlefield 2 for the PC, set to ship next spring, and its console cousin, Battlefield: Modern Combat for the Xbox and PlayStation 2, due next fall.

Currently, Electronic Arts has a multiyear agreement to publish all DICE games. According to sources at Electronic Arts, with or without total control of the company, EA will continue to publish Battlefield and other game franchises from Digital Illusions. When the votes are tallied next week, the source said, EA will decide if it intends to extend or withdraw the buyout offer.

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