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Analysts ponder Ubisoft, Take-Two union

As the standoff in Electronic Arts' proposed takeover of the Grand Theft Auto IV publisher continues, <em>Forbes</em> suggests the French publisher might consider a merger.


At the beginning of June, Electronic Arts announced that it would be extending its $2 billion offer for Take-Two Interactive for a third time. Take-Two executives have made their feelings clear by repeatedly advising shareholders to not sell their stock, as they believed the time and price weren't right.

The impasse continues. On one hand, Electronic Arts has a total of $3.3 billion to throw around, having recently secured the promise of a $1 billion loan for any extra costs relating to the takeover of Take-Two. On the other, Take-Two recently reported sales of over 8.5 million units of Grand Theft Auto IV, and its stock today was trading upward of $27--over $1.25 above EA's $25.74 per share offer.

After the original shock offer for the Rockstar parent was made by EA, Take-Two responded by stating that the megapublisher was not its sole corporate suitor. No firms were named, but analysts have been speculating to Forbes as to which companies could be in the frame.

Both Activision and Ubisoft were identified by various analysts in the article as potential buyers or partners. The names were floated despite the fact that in February the Assassin's Creed publisher stated it wasn't interested in big acquisitions, and Activision said it had previously considered Take-Two but decided it wouldn't be a desirable business combination.

"Ubisoft has grown phenomenally over the past few years," Signal Hill analyst Todd Greenwald told Forbes. "But the only way for them to continue to grow is to enter categories that they aren't in."

Cowen and Co. analyst Doug Creutz added, "Ubisoft has shown they do a good job of managing original intellectual property. Culturally, Take-Two developers would not have a problem at Ubisoft because they allow a decent degree of creative freedom."

Wedbush Morgan analyst Michael Pachter said he also believes that the two companies are a good fit for each other.

According to Forbes, Ubisoft doesn't have the cash on hand to buy Take-Two outright at the current EA bid price. A merger could be possible, although Electronic Arts itself has owned some 20 percent of Ubisoft since 2004.

When contacted by GameSpot, Ubisoft representatives would only say "We do not comment on rumors or speculation." As of press time, Take-Two representatives had not returned requests for comment.

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