Take Two takes in TDK sans Shrek

Rockstar parent finalizes acquisition of media tie-in publisher, minus the rights to one of its biggest franchises, sending its stock slipping.

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Take Two Interactive finalized its acquisition of TDK Mediactive today, closing a deal that had been initially proposed in September. Under the terms of the deal, Take Two will pay $12.8 million for TDK's 23,005,885 outstanding shares (a cost of $0.55 per share) and pay TDK Mediactive's former parent, TDK USA, $4.3 million in cash and $5.4 million in stock.

The purchase will add TDK's mostly younger-skewing film and TV-based games, which include such as Dinotopia, The Haunted Mansion, Robotech: Battlecry, to Take Two's more adult-oriented library, which contains Manhunt and the Max Payne and Grand Theft Auto franchises. But the $12.8 million price tag does not include the rights to game tie-ins to the computer cartoon Shrek, including the upcoming Shrek 2, which will now be published by Activision and developed by Luxoflux.

The exclusion of the Shrek license and the cost of the deal caused several securities firms to downgrade Take Two's stock, causing its share price to tumble $2.41--some seven percent--to $31.67. However, other analysts noted that the reworked deal did not saddle Take Two with the $5 million debt attached to the Shrek franchise. "We believe that Shrek 2 would have to sell 4 million or more units with a heavy weighting towards consoles for the $5 million to look like a bad deal for [Take-Two]," said RBC Capital Markets analyst Stewart Halpern. Given the poor reception of the previous Shrek games, such numbers seem unlikely.

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