Analyst: Activision and Take Two Combination Would Make Sense

A few weeks ago rumors from inside the industry suggested that publisher Activision, one of the biggest players in the video-game world, was interested in buying up Take Two in order to gain control of developer Rockstar and its important cash cow Grand Theft Auto.

Arvind Bhatia is an analyst working for Stern Agee and in a research note he says a new company that combines the assets of Take Two Interactive and Activision makes sense from a business point of view.

He stated, “Activision will benefit from taking control of several proven intellectual properties at Take Two such as GTA, Red Dead, Max Payne, Bioshock, Mafia, Civilization, Midnight Club and new, upcoming properties such as L.A. Noire and Agent.”

He added, “It would help Activision diversify its portfolio, which has recently become too concentrated following the cancellation of titles such as Guitar Hero, Tony Hawk, True Crime (competitor to GTA) etc.”

Bhatia says that any attempt to take control of Take Two will cost Activision between 1.9 and 2.4 billion dollars, depending on how the various factions represented on the board of the company are viewing the offer.

Take Two franchises that could prove hits for Activision include BioShock, Civilization, Red Dead Redemption and the sports series NBA 2K11.

The takeover rumors could be linked to the fact that the creators of GTA will be finishing their contract with Take Two in early 2012 and that they have not yet announced a new game in their flagship series.

It's not the first time that Take Two is the target of a takeover attempt, with Electronic Arts trying to get enough shares to control the company back in 2008.

The offer was then around 2 billion but Strauss Zelnick, who is the chairman and president of Take Two, resisted the offers and EA was forced to drop it.