After months of resisting a hostile takeover by Electronic Arts, Take-Two’s Chairman and CEO both confirmed today that the two companies have entered into a “formal process and look forward to demonstrating to their Board the significant strides made by Take-Two since they last undertook a detailed review of our business in early 2007.”
Stopping short of outright endorsing a merger between the two companies, Take-Two CEO Ben Feder said: “We are continuing to consider all alternatives that will maximize value to our stockholders. As part of that commitment, we are engaged in discussions with other parties as part of a formal process to generate greater value and will act quickly to assist EA in moving expeditiously through our process. In the meantime, we remain focused on executing on our business goals and creating value for stockholders and consumers of our products.”
The change of heart comes in response to EA’s announcement earlier in the day that they will allow their takeover offer to expire tonight, August 18, 2008 at 11:59 p.m. This comes after an exchange over the weekend between the CEOs of the two companies. EA CEO John Riccitiello agreed to Take-Two’s offer to provide a management presentation to EA containing non-public information, in the hopes of showing that the company is valued higher than what EA was offering.
Previously EA had extended its offer a number of times, dating back to February 2008. EA’s offer of $2 billion for the outstanding stock was deemed inadequate by Take-Two’s leadership. While Grand Theft Auto IV provided a boost to the company’s stock price, it has since fallen below EA’s asking price.
