Electronic Arts bids for Take-Two
U.S. video game giant Electronic Arts on Sunday said it had made an unsolicited $1.9 billion (966 million pound) offer for "Grand Theft Auto" publisher Take-Two Interactive Software, escalating its battle with Activision for the title of biggest video game maker.
SABMiller will not bid for S&NElectronic Arts said it had pursued the deal privately since December, and Take-Two on Sunday immediately rejected the offer, a 50 percent premium to its Friday close, and accused EA of trying to scoop up a company in turnaround with an "inadequate" bid just before the publication of its next hit.
The $26-per-share all-cash bid is Electronic Arts' answer to Activision Inc's $18 billion acquisition of the gaming unit of French media and telecoms giant Vivendi. That combination, announced last November, is set to challenge EA's long-standing industry dominance.
Electronic Arts, publisher of blockbuster games like "Madden" and "Need for Speed," would become the largest sports game maker by far if it buys Take Two.
The offer follows months of speculation that Take-Two would be acquired by a major games publisher or media firm, with News Corp and Viacom often mentioned as possible suitors as they eye the fast-growing video game industry.
Take-Two said the offer valued it at a "significant discount" to peers. EA's offer would be about 18 times its expected fiscal 2008 earnings, while France's Ubisoft trades at 34 times expected earnings in the year ending March 2009 and Activision, with a similar year, trades at 24 times.
Take-Two Chairman Strauss Zelnick, who helped oust former management last March after it was laid low by accounting scandals and controversy over its games, said he hadn't ruled out a potential deal.
"We didn't slam the door, we just said look, the price is not right and the time is wrong," Zelnick told Reuters.
He declined to say what price he thought Take-Two should command but said it was clear EA was trying to pick up the company cheaply before the April 29 debut of "Grand Theft Auto IV", which is widely expected to be the biggest game of 2008.
Asked if Take-Two would enter into formal discussions with EA before the game's launch, Zelnick said: "We have to see what steps they take, and we have and will continue to operate in the best interest of shareholders."
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