EA Makes Offer To Buy Take 2

[Reddaye]

Just happened across this a few minutes ago and figured it might make an interesting discussion:

Electronic Arts just called me to let me know that they are making a bid to acquire Take-Two Interactive in an all-cash merger of about $2 billion.

The offer set Take-Two's stock at $26 per a share, about 64 percent over the company's closing stock price prior to the company's Feb. 15 offer.

Take-Two's board rejected the offer, leading Electronic Arts to make their offer public to the company's shareholders.

In the letter, attached in the jump, EA CEO John Riccitiello tells Take-Two's Stauss Zelnick that the buy-out would help both the company and its stock holders:

"Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two's game designers would also benefit from EA's financial resources, stable, game-focused management team, and strong global publishing capabilities.\ ... There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today."

Specifically, the letter mentions that EA could really help out with the launch of GTA IV.

[ROC]

Wait, I thought Rockstar split with Take Two recently, leaving them with basically the sports franchises and Bioshock/Civ?

[Reddaye]

Nope, Rockstar (and it's eight different sub-studios) are still a branch of Take-Two.

EDIT: Eight studios in R* now that I checked it. Vienna was shut down in 2006.

Edited February 24, 2008 by Drifter_2000

[Slogger]

Fuck, We cannot let EA get a hold of GTA, It will fuck the series up royalty.

[Thatz]

This would really mess up the sports games, IMO. It's bad enough that EA has total control of the football games, they don't need everything else as well.

[zero]

Fuck, We cannot let EA get a hold of GTA, It will fuck the series up royalty.

No it wouldn't, they would likely remain hands off with it and let Rockstar do what they do best. You don't spend $2 billion to fuck with something that made it worth that much money in the first place.

Get used to stuff like this, with video games becoming bigger than the movie industry, it's no surprise. Keep in mind, the majority of film and television is produced by six major companies - Disney, Time Warner, General Electric, Sony, News Corp and Viacom; don't be surprised when the majority of video game publishing is Microsoft, Sony, Nintendo, EA, Activision and THQ.

Edited February 24, 2008 by Zero

[Reddaye]

EA have set up a website all about their proposed buyout of Take-Two, including an FAQ.

EA Take2.com

Interesting read if nothing else.

[abundant]

To go with what Zero said, what other major franchise has EA screwed up royally or out right killed off once they were purchased? DICE's Battlefield series has held up, so has Criterion's Burnout and Maxis' Sims. They may have made a few mediocre games under the EA banner, but those franchises are far from screwed or dead.

[Reddaye]

To go with what Zero said, what other major franchise has EA screwed up royally or out right killed off once they were purchased? DICE's Battlefield series has held up, so has Criterion's Burnout and Maxis' Sims. They may have made a few mediocre games under the EA banner, but those franchises are far from screwed or dead.

[CQI13]

The biggest thing this would affect would be the sports games, in my opinion. EA did The Godfather game, right? First game I got with my 360 and still play it. I don't think they did a bad job with that. And as someone pointed out, some of the other games whose studios they have bought out have held up.

[abundant]

To go with what Zero said, what other major franchise has EA screwed up royally or out right killed off once they were purchased? DICE's Battlefield series has held up, so has Criterion's Burnout and Maxis' Sims. They may have made a few mediocre games under the EA banner, but those franchises are far from screwed or dead.

A lot of people still remember what EA did to Origin Systems, Bullfrog, and Westwood Studios. As far as franchises EA has killed, one of the most notable is the Ultima series. Ultima VIII: Pagan and Ultima IX: Ascension are the two biggest examples of EA making their developers rush out titles, which killed their quality. They also seem to be stuck in the past thinking that EA doesn't allow M rated games to be made (which hasn't been the case for a while now).

Edited February 24, 2008 by abundant

[Reddaye]

I know what EA did in the past, but my point still stands; Since acquiring DICE and Criterion, their trademark franchises are still good. In fact, the latest editions to those franchises are moving the industry forward; Burnout: Paradise's lobby system and Battlefield: Bad Company's sound technology and highly destructible environments.

[Maxx]

Take Two rejected them, thank god. EA was trying to buy low, before GTA 4 comes out and the buying price for Take Two goes sky high.

If it ever does happen, the government needs to step in and break up EA, as they're nearing monopoly status, and would definately hold one over the sports game genre. It'd be just completely unfair if the only sports games that came out were EASports branded games, especially for something like basketball, where EA's Live is just abysmal.

[Lint]

right now, the story is that, by publicly stating their intent, EA is basically saying "Its going to happen whether Take 2 wants it to happen or not" and Gamespot interviewed some wallstreet guy. He says to expect a hostile takeover

[Maxx]

Nah, I doubt they'll get enough shares to takeover. Shareholders know GTA is coming, they know it'll be a mega success and they know it'll drive up stock prices, it'd be foolish to sell right before that occurs.

Take 2 needs to merge with another publishter ASAP. ActivisionBlizzard would be a nice fit.

[zero]

If it ever does happen, the government needs to step in and break up EA, as they're nearing monopoly status

Hardly. Those laws are so lax now, something like EA is merely a blip on the radar when you look at how monopolized radio, television and film are. Even with the sports games, EA only has an exclusive deal with the NFL and NCAA - that doesn't stop anyone from making their own non-NFL football game. I don't like watching publishers getting gobbled up left and right either, but it's happened to all forms of entertainment, don't be surprised when video games follow suit.

[Maxx]

But its just cripples the industry. Gameday could barely survive when Madden and NFL 2K were both out. Unless EA buys Take Two and just fires everyone from 2K sports basketball team, you won't see another NBA sim game that isn't 1st party developed for a long time. They've already got a lock on Madden, which I think is moving in the right direction lately anyways, so that doesn't matter. I figure All Pro Football would be the only sports title 2K owns that EA might continue to publish.

As for baseball, well thats the only one I'm in favor of EA making again, as their MLB games were leaps and bounds better than 2Ks stuff.

But anyways, there's a reason most sports only have 2 games developed for them, its ridiculously hard to break into the market. EA swallows up Take Two and its over and they control the market in that category.

[PkmnTrainerJ]

http://uk.gamespot.com/news/6189525.html

EA have delayed their deadline and lowered their bid now.