Electronic Arts Ends Discussions With Take-Two Interactive

Authored by Mark Hefflinger on September 15, 2008 - 7:36am.

Redwood City, Calif. - Video game publisher Electronic Arts (NASD: ERTS) announced on Sunday that it has terminated its discussions with "Grand Theft Auto" creators Take-Two Interactive (NASD: TTWO) on a possible $2 billion takeover of the company. Shares of Take-Two, which had repeatedly rejected EA's bid as undervaluing the company, were down nearly 22% on Monday afternoon from their closing price on Friday.

EA said in a statement that it "continues to have a high regard for Take-Two's creative teams and products."

"Take-Two's business has continued to strengthen since the time EA first made its offer," said Take-Two CEO Ben Feder.

"We have delivered terrific products to our consumers and we've been rewarded with very strong financial performance. We have an exciting future ahead of us, powered by our profitability, a significant cash position, the absence of debt, an undrawn credit facility and a terrific lineup of games."

As for the other suitors that Take-Two had previously mentioned during its back-and-forth with EA, Take-Two chairman Strauss Zelnick said the company remains "actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives."