EA take on Take Two

Briosafreak

Briosafreak

Lived Through the Heat Death
The news follows weeks of rumors that Take-Two would be the subject of an acquisition bid, with Viacom touted as a possible suitor at $1.5 billion. EA has, it turns out, attempted to buy Take-Two for $25 a share, and, after being rebuffed, has upped the ante by a buck. But the firm has warned shareholders that they won't get a better price.

EA's proposal of $26 per share in cash represents a premium of 64 percent over Take-Two's closing stock price prior to the company's bid.

EA Chief Executive Officer John Riccitiello said "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."


He urged Take-Two shareholders to accept the bid, "There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today."



EA had warned Take-Two's bosses that if they refused to engage in negotiations, the company would go public with its bid. Today, EA made good on that threat.



Take-Two's assets include Grand Theft Auto 4, which ought to be the biggest game of 2008. EA says it wants to get the deal done before the game's release in order to avoid disruption.
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From Next Gen.

I'm not sure if all this consolidation is good to the industry. oh well.
 
Interesting find Briosafreak,

I find this all rather curious, at one point that head figure of EA was talking of how they were destroying developers and game studios that had made some really good games (not sure if Take-Two is a developer, I think its a publisher) and that EA really wanted to change their continious sequel making policy.

And now they are back on the road of acquiring any significant competitor/developer and put them under their control in a bid to establish a monopoly on developers/studios in the West (don't worry Japan, you're next).

If memory serves me well, that would put them in control of the Civilization series and the Bioshock licence, right?
 
WOW.

I'm stunned. When you think the toilet monster has run out of shit, a turd lands on your head.
 
Stag said:
Didn't an EA rep just come out and say that buyouts are bad?
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That is incorrect.

John Riccitiello never said buyouts or takeovers are bad, he said the corporate model EA applied in regulating the creativity of the companies it purchased was bad, hence his "exciting new" system called "no duh, Sherlock" by most others: purchase a studio, invest money in their products and leave their creativity relatively unshackled.

'course it's all smoke and water. They still want BioWare/Pandemic to produce 10+ titles over the next 3 years and to make back the invested 600 million in the next 2 years. Insanity still rules EA.

This? Yeah, just another piece of corporate muscling.

The real news here, for those who have trouble reading between the corporate speaks line:
- Riccitiello went "Hey man we want to buy you" to Take-Two, offers 2 billion
- Take-Two board of directors went "no, and fuck you"
- Riccitiello said "that disappoints me, but you will soon learn resistance is futile" and opens a website
The purpose of this is not to let us know, but this is typical corporate backhandedness. Riccitiello is letting the shareholders know that rather than hang on to their shares in a possible risky venture (notice how he paints off Take Two in the letter, you'd think they were on the edge of a financial crisis), they can cash in right now thanks to EA.

And honestly, that's the sensible thing to do. This might drive up the price and then EA would have to reconsider, but what reason do the shareholders have not to cash in?
 
What? I'm sorry, Briosa, but that link doesn't provide any actual reasons, just more PR-speak.

"substantially undervalued" and "wrong timing" are terms thrown around at every hostile takeover bid. It's just what you do. I'm not talking about reasons IR will claims, I'm talking about, y'know, "actual" reasons.

Simple question: you either wait to see if Take-Two's turn-around plan continues to work in this highly unstable plan or you cash in now. So then the question is...why not cash in now? IR can't provide a reason, because there is no reason.
 
If you had read the letters between the CEO's that you can find there you would understand that Riccitiello wants to buy before GTA4 is released and T2' stock goes up and they find themselves in a better position, while Zelnick wants to wait for the release of the game, for obvious reasons.
 
Briosafreak said:
If you had read the letters between the CEO's that you can find there you would understand that Riccitiello wants to buy before GTA4 is released and T2' stock goes up and they find themselves in a better position, while Zelnick wants to wait for the release of the game, for obvious reasons.
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If you had read the letters between the CEO's you'd find Riccitiello is pretty explicit in that EA might not be interested in buying after GTA 4 is released, certainly not right after GTA 4 is released and has driven stock up. Hell, who the hell buys a company right after a big release is driving the stock up?

Zelnick should know that, but you're right, he's gambling that EA's interest is more stretchable than that. I wasn't talking about Zelnick, tho', his motives are another matter, but will the stockholders be willing to gamble on the same thing? Regardless of GTA4's potential, Take-Two has been a pretty up-and-down company and its Rockstar problems certainly aren't going to disappear. Hell, for an investor GTA4 might be more of a liability than an asset considering it might cause another wave of stock-crunching controversy.
 
Briosafreak said:
but will the stockholders be willing to gamble on the same thing?
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That's the two billion question :)
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Well, without going too much into the guessing area, isn't a likely case scenario that this publication by EA drives up the stock price a bit and then they sell for an adjusted offer?
 
We'll have to see first if EA goes all the way hostile, for that they need to try to appoint new board members for T2 in the meeting that is going to happen in a week or two. Price of T2 equity spiced up 40% on pre-market over the weekend, if they get a rise like that on todays session than EA's offer won't look so good after all. We'll see.
 
Where's the Trust Buster when we need 'em, c'mon who's hiding the body and who's got that rejuvenation potion, we gotta get this guy back on his feet and defending independant IPs or else we're gonna wind up with Demolition man knocking on our door.
 
They're in the business to make money, I know that, but this is seriously going too far, honestly I'd buy a Maxis game over an EA game, a Westwood game over an EA game, a Black Isle game over a Bioware game, and I'm sure there's a bajillion others flitting about that I don't know or can't remember.

The fact is that although CoD is a good series, you can't help but mourn the loss that created it, it is true that one must behold change or die, however this kind of change cannot be good.

If I knew that the ENTIRE rockstar group, or the THQ group, or any of the others that get eaten up by this I wouldn't be so bloody edgy about it, but they'll destroy teams because they think that they can make them better, sometimes that's true, however the fans will have to sit through 2-3 bad games before the new team finds it's dynamic again and by then the IP will be all but worthless.

It's damn sad, I see people these days who go into the software business, not to make it on their own, but to get to the point where someone wants to buy them out, and that in all honesty bothers me.

I am far from god's gift to coding, however I don't go forward with a project or idea thinking 'oh how much can I get google to buy this off of me for?' because that's just a rubbish attitude to go forward with that does nothing for diversity, instead only makes the situation worse in the long run.

But 'tis the curse of capitalism, we're too busy focused on getting money that we forget that it's only a means to an end, and should not be the end itself.
 
Capitalism is perfect, don't be foolish

GameDaily has an insightful article on how this is showing a move of the gaming industry to become more like the movie industry (y'know, "New Line Cinema, an AOL Time Warner company"). I might not fully agree, but it looks like a likely development. And in that case, all we'd have is big bloated companies and indies. Like Hollywood.

Hint: this year's Oscars all went to non-establishment or un-Hollywood films. Hint hint?
 
If it was perfect, why are there so many unhappy people?

:P :D

Besides, I'm not bashing the mentality, in theory everyone likes to get paid based on the merit of their work, however capitalisms side-effects are obviously greed, and making money into the new age god.

Just like communism's theory is that everyone supports each-other, a grand philosophy that if everyone was supportive of each-other it would work towards great things, however the side effects are sloth, and a sense of entitlement for doing little to nothing.

Nothing's perfect, and I don't claim to know the answer, but buying out everything in sight shouldn't be an answer, just look at the OS market, there's only one viable solution to an OS for the common North American idiot, and that's windows, not to mention the gamer market's been suckling that teat for over a decade and a half now.

Do we want games to become just like the OS market, where there's only one choice that fits most scenarios and it's controlled by one company?

Hopefully Ubuntu can slap Microsoft around a few times and get game developers to start realizing that Linux is also a viable development platform.
 
Mord_Sith said:
If it was perfect, why are there so many unhappy people?

:P :D
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People who want to can use other operating systems, watch small studio movies, etc.

remember, the movie industry is still developing, and as technology becomes more affordable it becomes more and more realistic to think that movies can be produced by anyone. Games will likely follow suit, its just one step in an eternal evolution of the markets. Condemning the current state of things might as well be also condemning the things that it can or will bring in the future. Capitalism is all about transient markets.
 
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