EA secures $1 billion loan commitment

Back in February, shock news hit that Electronic Arts had made an offer to buy Rockstar Games parent company Take-Two Interactive. Take-Two executives refused an initial private offer of $25 a share, saying that the price wasn't right. Analysts made it known that they didn't think it was either--but not for the same reason--believing the offer overvalued the firm. When EA went public with its $26 a share offer, Take-Two still refused to consummate the deal.

Since then there have been numerous twists and turns in the saga, including shareholder unrest, Take-Two executives instituting a poison-pill takeover defence plan, and a lawsuit.

After confirming that it was prepared to go for a hostile takeover, in April EA extended the deadline of its offer to May 16, but also lowered the bid to $25.74 a share. Take-Two then reiterated that the deal was "the wrong price at the wrong time."

Today, four days before the latest deadline, Electronic Arts published an SEC filing revealing it has now secured a commitment for an extra $1 billion toward the buyout from a consortium of investors including Morgan Stanley and the Bank of Nova Scotia. Along with the $2.3 billion in ready cash that it reckons it can lay its hands on, the grand total comes to $3.3 billion.

The loan can be requested at any time up until January 9, 2009, and must be paid back before August 9, 2009.

EA has made no secret of the fact that Rockstar, which recently released the record-breaking Grand Theft Auto IV, was the jewel in the crown of the deal. CEO John Riccitiello praised the developers, saying, "I believe the company is fully justified in calling themselves Rockstar because that's what they are in the industry." Today, in an interview with The Wall Street Journal, Rockstar president Sam Houser returned the compliment. He called Riccitiello "the real deal," but added that a takeover wouldn't mean he would be looking for EA's approval on content.