EA's Take-Two takeover bid turns hostile

Back in February, Electronic Arts made a $2 billion offer for Take-Two, which Take-Two promptly turned down, stating that it didn't believe it was enough.

Later in the month, Take-Two made it known that EA was not the only suitor it had and also secured severance plans for its employees in the result of being taken over and downsized.

However, by the beginning of this week, some of the company's shareholders were getting restless. Two major stockholders ditched a percentage of their Take-Two stock, and one shareholder filed a lawsuit against the company for not exploring EA's offer.

Everyone's been waiting to see what EA's next move would be: Would the company put a higher offer on the table or attempt a hostile takeover? Today, the megapublisher has decided on the latter, reports The Wall Street Journal.

Electronic Arts has now confirmed that it will be taking its offer directly to the shareholders of the Grand Theft Auto IV and BioShock 2 publisher at the same price it originally gave--$26 a share.

CEO John Riccitiello commented, "We believe Take-Two investors will see our tender offer as the best way to maximize the value of their investment in Take-Two. This tender offer provides a clear process to complete the proposed transaction."

The tender offer is set to expire on April 11. If successful, the acquisition would be the biggest prize in EA's recent buying spree, which saw it subsume such developers as BioWare/Pandemic and Digital Illusions CE last year.

[UPDATE] Several hours after EA's announcement, Take-Two issued a statement urging its shareholders to stand fast. "The board of directors...today recommended that Take-Two stockholders take no action at this time in response to the announcement by Electronic Arts that it has made an unsolicited conditional tender offer to acquire all of Take-Two's outstanding shares of common stock for $26 per share in cash," it said.

However, Take-Two also announced it will give EA's offer a second look. The company said that, "Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisers, Take-Two's Board will review and consider EA's offer, and within 10 business days, will advise Take-Two's stockholders of the Board's position regarding the offer as well as its reasons for that position." Assuming the 10-day period started today, Take-Two's response should arrive by or on Wednesday, March 19.