EA Lets Offer to Buy Take-Two Expire; Companies Still in Talks

Authored by Mark Hefflinger on August 18, 2008 - 6:12am.

Redwood City, Calif. - Video game publisher Electronic Arts (NASD: ERTS) said on Monday that it will let its offer of $25.74 per share to acquire rival Take-Two Interactive (NASD: TTWO) to expire at midnight tonight. "Given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash. In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season," EA CEO John Riccitiello wrote in an open letter to Take-Two chairman Strauss Zelnick.

EA initially made a $2 billion bid for Take-Two in February, and has extended the expiration date on that offer more than once.

While the current offer will expire, the two companies remain in negotiations, as Take-Two will be providing a limited due diligence management presentation to EA.

Take-Two had previously said EA's offer undervalued the company, and aimed to take advantage of the impending release of its "Grand Theft Auto IV."

"We have been willing to have EA participate in this process following the successful launch of GTA IV, and we are happy to include EA now," Zelnick wrote in response to Riccitiello's letter.

"We are continuing to consider all alternatives that will maximize value to our stockholders. As part of that commitment, we are engaged in discussions with other parties as part of a formal process to generate greater value and will act quickly to assist EA in moving expeditiously through our process," added Take-Two CEO Ben Feder.