Take-Two Rejects $2 Billion Buyout Offer from Electronic Arts

Authored by Mark Hefflinger on February 25, 2008 - 11:38am.

New York - Video game publisher Take-Two Interactive's (NASD: TTWO) board has rejected an unsolicited bid of about $2 billion for the company from fellow games maker Electronic Arts (NASD: ERTS), saying the proposal undervalues Take-Two and is a "highly opportunistic" move given the pending release of "Grand Theft Auto IV." The offer of $26 per share represents a 64% premium over Take-Two's stock price on Feb. 15, the day before EA made its proposal.

"Electronic Arts' proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the company," said Take-Two executive chairman Strauss Zelnick.

"There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today," EA CEO John Riccitiello wrote in a letter to Zelnick.

Take-Two shareholders ousted the company's management team last year, after a number of setbacks that included guilty pleas to stock backdating charges by several former executives, and controversy surrounding violent and sexually explicit content in its titles.