Take-Two battles FTC investigation
GTAIV publisher says regulatory body's request for information in relation to EA buyout is too broad and will incur undue expense; court hearing scheduled for June 24.
The Federal Trade Commission has acted as a substantial roadblock for Electronic Arts in advancing with its hostile takeover of rival publisher Take-Two. As part of its second and third deadline extension of the tender offer to Take-Two shareholders, EA cited the FTC's requirement for additional time to conclude its regulatory investigation into the merger.
EA's most recent move on account of the FTC appears to have been the last, however. As part of a deal reached on June 3, EA agreed not to proceed with its $25.74-per-share shareholder buyout proposal until the earlier of either the FTC concluding its investigation or the lapse of 45 days after EA provides "substantial compliance with [the FTC's request for additional information]."
Now, it's Take-Two's turn to enter legal wrangling with the FTC. As revealed in a Securities and Exchange Commission filing today, Take-Two said that the US District Court for the District of Columbia has ordered the publisher to explain why it has not complied with a subpoena and civil investigative demand issued by the FTC in relation to EA's buyout offer. The DC court has scheduled a hearing for June 24 to determine whether Take-Two is required to comply with the FTC's request, and Take-Two intends to defend its position in court if it cannot reach an agreement with the FTC prior to the hearing.
In a statement, Take-Two explained its position, saying the FTC's request places an undue burden on the company because of the breadth of the information requested. Take-Two also said that it is willing to comply with the FTC, provided the regulatory body narrows the scope of its inquiry.
"Prior to the issuance of the FTC's subpoena and [civil investigative demand], the company has been cooperating fully with the FTC with regard to their review of EA's offer to acquire the company," said Take-Two in the SEC filing. "The company has already provided enormous quantities of data and access to key executives, and has offered to provide the FTC staff with additional documents and information. Nevertheless, the company believes the FTC's subpoena and CID are unnecessarily broad and would entail unacceptable additional expense to the company."
"To limit the inordinate expense and labor that the FTC's demand would entail, the company has sought to obtain reasonable limits on the scope of the information sought," Take-Two continued. "The company will continue to cooperate actively and produce documents in response to the FTC's previous requests, and will of course attempt to seek an acceptable resolution to this matter as quickly as possible."
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