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Electronic Arts Ends Acquisition Talks With Take-Two (Update2)
By Gillian Wee
Sept. 14 (Bloomberg) -- Electronic Arts Inc., the second- largest video-game publisher, said it ended discussions with Take-Two Interactive Inc. and won't make a proposal to buy the company.
Electronic Arts made the decision after considering management presentations and other due-diligence materials, it said in a statement today. Take-Two, the maker of the top-selling ``Grand Theft Auto'' series of games, is ``actively engaged'' in talks with other parties to consider strategic options, Chairman Strauss Zelnick said in a separate statement.
``We've never been in an auction mode; we've been in the mode to consider our strategic alternatives,'' Zelnick said in a telephone interview. ``We thought the steps Electronic Arts took were unfortunate.''
Electronic Arts had agreed to hear a presentation from Take- Two last month and dropped its hostile $2 billion bid for the game maker. The Redwood City, California-based company had initiated the unsolicited $25.74-a-share offer earlier this year after Take-Two's management rejected purchase attempts.
``It was a well-informed decision,'' said Owen Mahoney, senior vice president of corporate development at Electronic Arts, in a telephone interview. ``We don't need Take-Two to make EA successful.''
Spore, Warhammer
Electronic Arts is executing its three-year strategy and sees its future as ``bright,'' having just shipped its Spore game and being on the verge of releasing its ``Warhammer'' online game, Mahoney said.
Electronic Arts in July reported a wider first-quarter loss than analysts had estimated and cut its annual profit forecast because of tax-accounting changes. The company lost its status as the world's largest video-game maker with the creation of Activision Blizzard Inc. this year.
Take-Two on Sept. 4 reported a third-quarter profit that exceeded analysts' projections on sales of ``Grand Theft Auto IV.'' The surge led Take-Two to lower its profit outlook for the quarter ending Oct. 31 and raise the full-year projection, Chief Executive Officer Ben Feder said in an interview.
Zelnick wouldn't identify the parties Take-Two is in negotiations with.
``We've never said this is necessarily the time to make a deal,'' Zelnick said. ``There's no need to make a deal.''
Shares of Electronic Arts, down 23 percent this year, dropped 57 cents to $44.99 in Nasdaq Stock Market trading on Sept. 12. Take-Two, which has risen 19 percent this year, gained 24 cents to $21.89.
To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.
Last Updated: September 14, 2008 18:52 EDT
By Gillian Wee
Sept. 14 (Bloomberg) -- Electronic Arts Inc., the second- largest video-game publisher, said it ended discussions with Take-Two Interactive Inc. and won't make a proposal to buy the company.
Electronic Arts made the decision after considering management presentations and other due-diligence materials, it said in a statement today. Take-Two, the maker of the top-selling ``Grand Theft Auto'' series of games, is ``actively engaged'' in talks with other parties to consider strategic options, Chairman Strauss Zelnick said in a separate statement.
``We've never been in an auction mode; we've been in the mode to consider our strategic alternatives,'' Zelnick said in a telephone interview. ``We thought the steps Electronic Arts took were unfortunate.''
Electronic Arts had agreed to hear a presentation from Take- Two last month and dropped its hostile $2 billion bid for the game maker. The Redwood City, California-based company had initiated the unsolicited $25.74-a-share offer earlier this year after Take-Two's management rejected purchase attempts.
``It was a well-informed decision,'' said Owen Mahoney, senior vice president of corporate development at Electronic Arts, in a telephone interview. ``We don't need Take-Two to make EA successful.''
Spore, Warhammer
Electronic Arts is executing its three-year strategy and sees its future as ``bright,'' having just shipped its Spore game and being on the verge of releasing its ``Warhammer'' online game, Mahoney said.
Electronic Arts in July reported a wider first-quarter loss than analysts had estimated and cut its annual profit forecast because of tax-accounting changes. The company lost its status as the world's largest video-game maker with the creation of Activision Blizzard Inc. this year.
Take-Two on Sept. 4 reported a third-quarter profit that exceeded analysts' projections on sales of ``Grand Theft Auto IV.'' The surge led Take-Two to lower its profit outlook for the quarter ending Oct. 31 and raise the full-year projection, Chief Executive Officer Ben Feder said in an interview.
Zelnick wouldn't identify the parties Take-Two is in negotiations with.
``We've never said this is necessarily the time to make a deal,'' Zelnick said. ``There's no need to make a deal.''
Shares of Electronic Arts, down 23 percent this year, dropped 57 cents to $44.99 in Nasdaq Stock Market trading on Sept. 12. Take-Two, which has risen 19 percent this year, gained 24 cents to $21.89.
To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.
Last Updated: September 14, 2008 18:52 EDT