Electronic Arts Extends Offer for Take Two

After the last Take Two shareholder's meeting, it seemed clear that Electronic Arts did not have the shares needed for the hostile takeover of Take Two. The company decided on again urging shareholders to hold on to their shares, rather than sell them, and it also issued a new shares package for chairman Strauss Zelnick, as a further testament to its growing financial strength and to the fact that it can survive the hostile takeover bid.

It seems that Electronic Arts is unrelenting in pursuing its objective. As soon as the April 18 deadline has passed, the videogaming giant issued a statement in which it declared that it is taking the necessary steps to continue its bid for Take Two. The new deadline of May 16 comes with a new price. If initially EA had offered 26 dollars per share of Take Two, they now offer just 25.74 dollars for one share. This is in response to the shares issued to Strauss Zelnick and EA are quick to point out that the overall value that EA has set for Take Two is the same as before.

What's going to happen now? It's pretty much anyone's guess, but there are a couple of important events that are going to take place between now and May 16. On April 29 Take Two will get Rockstar's GTA IV top the gamers, in what can only be described as the biggest game launch of 2008. there will be two full weeks of GTA IV sales numbers until May 16, two weeks that may spell trouble for EA.

As GTA IV sells and the number of copies it ships are registered, it is likely that Take Two's overall value, both on the stock market and in industry analysis, will rise. Strong profits are expected and a Take Two that's flush with cash from GTA IV sales will be an even harder target to take down than now.

It's very likely that Electronic Arts will either increase its offer when the next deadline expires, in the hope that a more attractive financial package might clinch the deal, or that the videogame producer will renounce the takeover altogether. As the news on this issue breaks, we'll continue to bring them to you.