Following six months of negotiations, which began in February, Electronic Arts said in statement released early this week that the company was retracting its bid to buy Take-Two Interactive. EA said that while the company still thought highly of T2 and its products, it had terminated discussions.
EA’s original bid of $2 billion at the beginning of the year kicked off talks regarding the value of Take Two. Strauss Zelnick, Chairman of the Board of Take-Two, said Sunday that the company repeatedly rejected the offer from EA.
"We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders,” said Strauss.
CEO of Take-Two, Ben Feder, said that Take-Two’s business had continued to strengthen in terms of products and finances during the six months the EA offer was on the table. Indeed the release of GTA4 has been successful, selling more than six million copies in it’s first week and grossing more than $500m, however, reports following the announcement to put an end to discussions show that both EA and Take Two stocks have dropped.
At close of trade on Monday, Take-Two shares were at $16.57 down from $21.89 prior to the announcement. Although not as severely, EA’s shares also saw a decline during Monday trading, closing with just over a 5 percent loss compared to shares prior to the announcement.
Rumors about why Take Two refused the offer from it’s much larger competitor range from the glaringly obvious to vague speculation. The GTA franchise is extremely successful and Take-Two clearly wants to keep a tight fist on it until the company can figure out just how much it’s worth. However, that aside, a report from Crispy Gamer citing Citigroup analyst, Brent Thill, speculated that EA could have found problems with Take-Two’s release pipeline for next year and concerns about re-signing key development talent at Rockstar Studios
Take-Two claims it is still in talks with other partners, which according to the Guardian newspaper include Viacom.