EA Gets a Billion Dollar Loan to Storm Take-Two's Castle

pink and the brain

EA issued a press release yesterday regarding another bid at trying to take over Take-Two, and while we felt that this was just another chapter in the soap opera not worth mentioning, today, I just had to post something about it because our favorite analyst has thrown his two cents in on the subject.Michael Patcher, whom one of our writers calls “his nemesis” has had plenty to say regarding the back and forth between both companies, and while visiting Game Politics this morning, I came across this lovely bit of information.

Apparently, EA has only $1.7 billion in the bank, and the deal they have offered Take-Two deal is $2.1 billion, so they have talked to Morgan Stanley, the Bank of Nova Scotia and several other financial institutions who have all agreed to loan them some money so as to secure the deal.

Here is what I pulled from Game Politics:

It is something that should be expected. After [the acquisition of] Pandemic/BioWare, EA has only around $1.7 billion in available cash… The Take-Two deal is around $2.1 billion… so they’re short. They also probably need around $400 million in available cash for working capital needs, so they need to raise around $800 million to complete the deal. The extra $200 million is just a cushion, although I suppose it could be construed as how much higher they’re willing to go [for Take-Two]…

The timing isn’t particularly unusual, a bit later than I would have thought, as they should have started the process on March 13 (when they went hostile). However, I have no experience in credit markets like we’re experiencing now, so maybe it’s normal to take 8 weeks to get something like this done. It’s also possible that they waited for their new CFO [Eric Brown] to start in order to allow him to negotiate terms…

I would not read any significance into the filing, other than to say that if they want to raise their offer price [for Take Two], they will likely need a higher credit line…

So EA, what are we going to do tonight? The same thing we do every night, Pinky – try to take over the world!

Via: Game Politics

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5 Comments on EA Gets a Billion Dollar Loan to Storm Take-Two's Castle

Kev_M

On May 10, 2008 at 11:50 am

They really are getting desperate to get their hands on GTA4′s revenue and any future GTA title arent they.

Will be a sad day for gaming if Take Two fall from the pressure and sells up.
Can kiss the quality of rockstar goodbye as their forced into churning out a GTA 09 , GTA 2010, and continue to churn out yearly titles under the EA brand

Fromps

On May 10, 2008 at 1:40 pm

EA cannot buy Take-Two, because if that happens Ragnarok will happen, and we don’t want that now.

Joe

On May 10, 2008 at 10:33 pm

If everyone stops buying EA’s games it will sure end their goals in taking over the world

Xboxlenny

On May 11, 2008 at 11:11 am

EA will ruin GTA, it wont be the same, Take two are a gold mine with the GTA series, if EA takes them over the quality of GTA is over. DONT SELL Take Two. EA you suck, its large companies that is killing all the small developers and that will cause less variety of games and new ideas. i hate monopolies.

ManOfTeal

On May 12, 2008 at 8:29 am

EA = Walmart.

I hate Walmart.

Go Marlins!!!!