Rumor EA Plays Hard Ball, Walks Out On Take-Two Negotiations

Rumors are flying surrounding EA and Take-Two negotiations. After all the time EA spent stalking T2 in an attempt at a hostile take over, it seems EA has walked out of their secret merger negotiations. According to Seeking Alpha, an investment site, T2 stock took a hit because of the rumor.

Yesterday’s session featured some strange exchanging of Take-Two Interactive Software Inc. (TTWO) shares, just one day before the company is set to release earnings.

There was no news released, though Barron’s later said that the price decline was due to rumors about Electronic Arts Inc. (ERTS) walking away from merger talks. ERTS had an executive speak at a conference right around noon.

GamePolitics finds the rumors believable given the open hostility between the two companies since the beginning of the year.

While Seeking Alpha ultimately discounts the rumor, it’s known that EA management is not especially fond of the Strauss Zelnick team at T2. That has a lot to do with the rich deal Zelnick put in place for himself and his crew in the event of an acquisition. Given that atmosphere, hardball tactics (such as a walkout) would seem to be in the realm of possibility.

I personally find it hard to believe that EA would walk out of negotiations. Playing hardball this late in the game is is fairly useless considering T2 knows just how badly EA wants to buy it out. Succeeding in dropping the value of T2 stock doesn’t change the fact that EA extended its final buyout offer deadline several times over the past year.

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1 Comment on Rumor EA Plays Hard Ball, Walks Out On Take-Two Negotiations


On September 5, 2008 at 1:23 am

T2 Is going down the ter and all ea could do is help IMO T2 arent what they used to be and bioshock was poor .. so short and no replayability.