Megapublisher takes $2 billion offer for the Grand Theft Auto, BioShock, and 2K Sports owner to shareholders after Take-Two execs decline the deal.
After last year's surprise announcement that Vivendi would be merging its games business (including World of Warcraft creator Blizzard Entertainment) with Activision in a staggering deal worth $18.9 billion, Electronic Arts' position as the world's largest third-party publisher was in jeopardy. It appears EA wants that distinction locked up for itself, as the publisher today proposed another industry-shaking deal: the acquisition of Take-Two Interactive for roughly $2 billion.
EA revealed that in a letter sent last Tuesday by EA chief executive officer John Riccitiello to Take-Two Interactive chairman Strauss Zelnick, Riccitiello offered the all-cash deal, which is a 64 percent premium over Take-Two's most recent closing stock value on the day of the offer. However, Take-Two's board of directors declined the offer, according to EA, which led directly to today's announcement.
"Our strong preference is to conduct a private negotiation," the letter stated. "If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two's shareholders."
Riccitiello was proposing a different message in November, when in a presentation at the Reuters Media Summit he suggested that acquisition opportunities in the gaming industry were drying up. That was just days before the announcement of the Activision-Vivendi union.
If the proposed Take-Two takeover were to go through, it would give EA control of some hotly contested industry territory. First and foremost, EA would have control of Rockstar Games and its controversial and lucrative Grand Theft Auto franchise, significantly beefing up its slim roster of hit games rated M for Mature. In addition to that, the sports gaming market would see tremendous consolidation, as EA Sports and Take-Two's 2K Sports label have directly competed in the football, hockey, baseball, and basketball markets over the years. They each have their own new boxing franchise in development as well, with 2K's Prizefighter answering the bell against EA's Facebreaker.
Shortly after EA went public with the proposed deal, Take-Two explained its reasons for declining the offer, saying the publisher had undervalued its array of franchises and creative talent, and that it wouldn't be prudent to enter discussions of an acquisition so close to the April 29 launch of Grand Theft Auto IV. However, Take-Two executives left room for a deal to happen, saying they would be interested in beginning talks with EA starting April 30.
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
I hope that Take-Two interactive won't accept ANY offer...They and Rockstar Games would be ruined if EA would gain control :( I hate EA for this NONSENSE. How could thy think of doing such a thing??? Buying GTA???? C'mon let's be serious! ROCKSTAR GAMES 4 LIFE!!!!!!
This EA talk scares the crap outta me. I swear, if anything happens to NBA 2K9... EA will have to pay..
The one thing I don't get about the idea of paying billions for game studios, is that you can't buy the people who work there. There's no guarantee that you'll retain all the employees, and that's where the value lies.
Ok. This is now clear. All of the good games of Take Two will be ruined for sure. EA only takes care of itself. It wants profits. If I were Take Two I would turn down the deal, FOREVER. EA must learn it's lesson to strive hard so that its position as the world's largest third party publisher won't be on jeopardy. In anyway, I hope that EA will double their efforts on their own brand of games.
damn, EA trying to buy their compeation again, lords, hopefully taketwo is not that stupid, and won't accept a buy out offer, what will make ea stop trying to buy companies, god :: fumes ::
Don't do it take two!! EA is gonna turn your games into mediocre, recycled, over advertisted games!!
foxpro-gt wrote: This is kinda (scary) that EA its doing this...but i have not seen any game that has got worse because (EA) bought it so maybe no worries? After reading recent reviews on EA games, I replied: Ha! Have you read some of these reviews? Trust me, EA games are getting more and more mediocre. Don't do it, Take-Two! Don't doom your franchise to an also-ran!
whoever wishes to join the newly created National Anti-EA Games Union on facebook, here's the link:
EA is going to ruin Grand Theft Auto as well as many other major Take Two titles! Sign the petition! It may help! http://www.petitiononline.com/t2ea000/petition.html
This is the time when we will look back when our kids will ask us: 'dad, why do all videogames suck?' and we'll say 'it wasnt like that until the big corporations took over son' Its just like the music industry. The only times you'll get anythign decent is when a new movement starts that isnt controlled by the unholy mega corps. Otherwise its just more recycled crap. games were better in the 90's.
This is kinda scarey that EA its doing this...but i have not seen any game that has got worse because ea bought it so maybe no worries?
I am really tired of seeing Electronic Arts trying to and succeeding in buying these gaming companies. This crap has got to stop, otherwise we'll see nothing but EA on all the game titles.
this sucks EA does the most Crappiest Games they have nothing new and they are always halfbaked.
damn, i guess no hockey or basketball games for me. unless they replace the live series with 2K's games.
Being that I am a business major, I see what benefits EA stands to gain from this deal. No I wouldn't want them to monopolize the industry, but I'm a bit selfish in the fact that I wouldn't mind getting rid of some of the exclusive titles. As far as the supposed harm it will do to 2K, I don't think EA is as stupid as some would think. The Madden series has the NFL; March Madness & NCAA football :( have the NCAA; NBA 2K8 will have the NBA. Remember that it was Take-Two that pulled out of the NCAA deal. EA wants to maximize profits, so I disagree with anyone who believes they will tarnish GTA or Bioshock. Other than those games, Take-Two will be skating on thin ice without this deal. We are so concerned with the affect EA will have on the industry, what about the "going-concern" for Take-Two? Remember that GTA is just now becoming a mult-platform title so they really need this deal to expand their profits. I wouldn't be upset to see the head of T-T cut off. They haven't been pushing the market well. I know this might sound like being on EA's jock, but I'd rather see them buy out T-T than to see the company fold or hold on by a GTA string.
Taketwo please what are u doing? please don't sell it to ea if u will sell it than we get bad gta in the futur please Taketwo
Well, it seems that EA is makin a lot of money lately... I think that in the end will be only EA in the USA... and this is bad, realy bad... but if they continue this way... PLZ 2k, Stay Vertical!
If this acquisition goes through it will be terrible for the industry. Monopoly is never a good thing for us costumers.
The sad fact is, people still buy ea games because there is little alternative - practically all the sports licenses are already owned by ea, so if you want to buy a videogame of your favourite sport, you have little to choose from but ea. This trend will grow past sports and move into other areas, as has already been seen with their acquisition of bioware. Soon you'll have the major hardware companies who have their own small developers within them, and then you'll have ea - THE 3rd party developer/publisher. The only one. If Take2 is gone, pretty much only Ubi and Vivendi/Activision remain. That's practically it. What a dark future for games.
I have no doubts in my mind that EA would actually buy out every publisher and developer in the business if they had the money. Can you imagine if every game was made by the same company, different people, but ultimately the same people in charge... that would be a sad world indeed. Relax EA before you make your tarnished reputation even worse.
Sounds like EA is trying to make some power moves... IF YOU CAN'T BEAT'EM... THEN BUY THEM OUT!
basically the sentiment is "merge or be destroyed". how completely ignorant, and what a hopeless message that sends out to the rest of the companies who are merely trying to carve a niche for themselves. so, is anyone HERE a shareholder?
"Our strong preference is to conduct a private negotiation," the letter stated. "If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two's shareholders." how far have we come as a civilization where this kind of "negotiating" is deemed acceptable. this has to be THE most vile and dispicable display of corporate politics (or whatever you'd like to call it) i have ever witnessed. good for take two for blowing the whistle on EA. a few more blows like this, and EA will eventually sink themselves.
EA was caught off guard by the activision merger. Instead of making good games, they rather buy them. Pathetic!!
TheBrownBlazer "I just invested 5k in take-two. Can this deal happen i want my 64% return lol." The stock has already gone up that much because of the offer so if you really owned the stock all you would have to do is sell it now to have your 64% return. The only reason to hold onto now it is if you think EA will offer a substantially higher bid.
What's everyone complaining about? Pandemic's founder has already gone on the record saying that EA has been giving them total creative freedom. Also 2k will have use of the NFL license.
When the gaming industry is destroyed we can thank the likes of EA and this type greedy takeover. Without 'competition'... the gaming industry will eventually die.
I don't like the idea of EA trying to take over Take-Two, but think of it this way: if it actually happens, and both companies share their resources with each other, Take-Two may be able to actually help EA bring some fresh ideas to their franchises, and vice-versa. That way, we won't be repeatedly sold the same games with improved graphics and new packaging.
Why make good games and broaden the fanbase when you can simply buy out the competition. EA is trying to become a monopoly like Microsoft.
First thougts:fffffuuuuuccccckkkkk!!!!!!! After that I think it would be a good move for both companies. For EA it's another knotch under the belt and it would help get some of those exclusive titles to both systems. For Take Two, it would be just like the Delta/Northwestern deal. If this deal went through, I can see Madden getting some much needed improvements to sway me towards buying it and believing in it [we all know 2K creates the most realistic sports experience outside of MLB: The Show]. One other thing we are forgetting is that EA is no longer trying to control the development of these great companies, rather, eat a bigger piece of the pie.
i dont buy Madden anyway.. its been mundane for years.. EA cant delve into new territories or come up with new and original properties unless it goes and buys the game companies that do try out new stuff.. i cant sit here and say i wont buy EA games, because its inevitable.. they do have some that i want to play.. and these days, its hard to really tell what companies are owned by whom.. everyone is hard on EA, but why arent the same things being said of Activision..?? we should be just as mad at them.. its unfortunate the gaming industry has to come down to just 2 or 3 super companies that own everything else and want to limit competition because they arent good enough to begin with.. so all we are left with are the $10 games on the respective networks that are truly original and worth playing.. i will be buying GTAIV tho no matter what happens.. anything after that is a question mark..
This sounds bad. It's better to have more competition and less of a monopoly. Competition is the best thing for the games market in making game companies strive to be better and better. I think EA needs to back-off in its continued acquisition of game companies.
An online petition has started for those of us who do not want Take Two to sell to EA.... http://www.petitiononline.com/t2ea000/petition.html
Damn EA. Grand Theft Auto, BioShock, Bully, and Manhunt will be ruined. People, please don't buy any EA games, or the next company that EA is going to buy is Microsoft!
Does eveyone else see the red flags here?!?!I hope that Take Two dosn't go through with this. Is EAs intention to buy up every publisher and developer until they own everything?!?!? Does anyone else think this is a bad idea. It's high time someone put EA in its place. It's bad enough that they kill almost every franchise they touch, as well monopolized football games. Why don't they just come up with their own console and do their own thing and stop trying to buy everyone else out.
If this happens, it will be the end of all good gaming. Take-Two please decline the offers everytime. EA is taking over the world. This is the end of gaming. This is it. EA, you couldn't be more evil.
If this happens grand theft auto will become a big steaming pile of **** and if i hear that this is actually going to go through i will not be buying gta 4 even though i have been waiting for it for almost 3 years now. Fuhck EA!!!!
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