Take-Two Still Believes EA's Offer is Insufficient
As if to confirm my suspicions that nothing will be worked out between EA and Take-Two by the new deadline of of June 16, Take-Two chairman Strauss Zelnick and CEO Ben Feder have made a statement which claims the deal “undervalues” Take-Two.
Prepare to get your quote on.
“This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our board of directors thoroughly reviewed and unanimously determined to be inadequate and contrary to the best interests of Take-Two’s stockholders.
“As such, the recommendation of our board of directors that stockholders not tender their shares to EA remains unchanged… We are confident in the significant growth potential of Take-Two and in the unique value of our business given our strong position in this growing and dynamic industry,” said Zelnick.
Feder also chimed in, stating, “EA’s highly conditional offer fails to compensate our stockholders for our exceptional portfolio of intellectual property, world-class creative resources, and our successful revitalisation initiatives.”
“In the last several weeks, our strategy and Take-Two’s value have been vividly demonstrated by two notable events. The record-breaking sales performance of Grand Theft Auto IV in its first week of release confirmed its status as the most successful videogame launch of all time and as a blockbuster on a par with any entertainment product ever released.
“We have also just announced an agreement with Universal Pictures to make BioShock, the universally acclaimed hit videogame, into a feature film, demonstrating how Take-Two is delivering value from our powerful and wholly-owned intellectual property. The small number of shares tendered into EA’s offer to date demonstrates that our stockholders agree with what our board has maintained from the beginning: EA’s proposal undervalues our company.”
I’m not going to claim to be any sort of financial genius, but while the two make a compelling argument, I think they’re wrong. At what point in time could Take-Two’s stock value be any higher than in the midst of a GTA launch and potential acquisition?
We’ll have more on this story as it continues to develop.