EA's Take-Two bid FTC compliant, no action before 8/21
Federal regulatory body says megapublisher has submitted required information on proposed purchase of rival; further extension puts next step six weeks away.
The great game-industry saga of 2008 continued today with the next step in Electronic Arts' protracted takeover attempt of Take-Two Interactive. In a filing this morning with the Securities and Exchange Commission, EA announced that it was "in substantial compliance" with the Federal Trade Commission's information requests.
Early last month, the FTC had requested additional information to ensure that the proposed buyout--which turned hostile in March--did not violate US antitrust laws. Some concerns had been raised because the deal would see EA Sports' sole major rival, 2K Sports, subsumed into EA's multibillion-dollar organization.
According to a recent earnings report, 2K Sports is losing money despite holding exclusive third-party publishing rights to Major League Baseball. EA has a complete monopoly on all major licensed football games, including NFL, NCAA, and Arena leagues, as well as the sole rights for FIFA-branded soccer games. Both companies develop and publish NHL hockey and NBA basketball games, although 2K recently let its NCAA College Hoops license lapse.
As a result of today's FTC announcement, EA's $2 billion bid for Take-Two will continue beyond its previously announced July 18 deadline. Although the Redwood City, California-headquartered company today promised no action until August 21, its offer currently stands at $25.74 per share of Take-Two stock, which was trading at $24.26 on the NASDAQ as of press time. Despite the fact that the offer would now earn its shareholders a profit, Take-Two's board has repeatedly and vociferously refused EA's advances, citing record-shattering sales of Grand Theft Auto IV as proof that the company would fare better on its own.