Gaming News: Take Two Interactive To Sign Agreement With EA

Video game maker Electronic Arts Inc. on Monday urged the publisher of “Grand Theft Auto” to quickly accept its unsolicited $2 billion takeover bid, saying it’s only a matter of time before it declares “game over” and pulls its premium offer. EA wants an agreement on a deal before the release of “Grand Theft Auto IV.” Take-Two Interactive Software Inc. says it’s willing to talk, but only after the next installment of its popular crime game goes on sale in April. 1

Take-Two said Thursday that during its second quarter, retailers sold 8.5 million copies of its hit game “Grand Theft Auto IV.” Take-Two’s management has argued that the game’s extraordinary performance demonstrates that Electronic Arts’ $2 billion takeover offer is too low. The strong results have propelled the company’s shares far beyond Electronic Arts’ offer of $25.74 a share. Take-Two’s stock closed Thursday at $27.65. 2

In a separate statement, Take-Two confirmed that it expects to sign a confidentiality agreement with Electronic Arts allowing EA to enter into Take-Two’s formal process to evaluate strategic alternatives. Take-Two also affirmed that it is continuing its discussions as part of the process to maximize value for stockholders. 3

Also working against a quick deal was an agreement announced Wednesday between Electronic Arts and the Federal Trade Commission. Electronic Arts cannot complete any acquisition of Take-Two until 45 days after it has complied with the submission requirements of the FTC, which is investigating the possible antitrust implications of amerger. 4

Industry analysts said that agreement suggested the agency was taking a keen interest in the proposed merger. Specifically, analysts speculated, the FTC is interested in whether Take-Two and Electronic Arts together would dominate sports-related video games, leading to less consumer choice and higherprices. 5