14 DAY TRIAL // Take Two, the developer of the Grand Theft Auto series, has declined the initial offer, citing the sum as being too low, but Electronic Arts has decided to keep the offer open so that Take Two could still take advantage of it.
Financially, the 2 billion initial offer is very interesting. The offer is a 63 percent premium on Take-Two's closing price over the previous 30 days, and a 64 percent premium over Take-Two's closing price on the 15th of February, the last trading day before EA sent its revised proposal to Take-Two. When the offer was received on the February 19th, chairman Strauss Zelnick of Take Two decided to reject it and no negotiations have taken place between the two companies since.
After the initial "no" response from Take Two, John Riccitiello, CEO of EA, has decided to make the offer public so that all the Take Two shareholders would be aware of it. The move is designed to up the pressure on the bosses at Take Two HQ and force them into acceptance. "There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today," wrote Riccitiello, clearly aiming to push shareholders towards EA. He also said that the release of GTA IV, in late April, would be hard for cash-strapped Take Two to manage without the resources that Electronic Arts can offer.
The games community is watching this acquisition drama unfold with mixed feelings. EA has a reputation of buying up developers with established intellectual properties only to create games based on those IP's that are less than stellar. Let's not forget that Electronic Arts has already acquired Bioware, in a highly controversial move. Last year also witnessed the merger between Activision and Blizzard in a move that was far less controversial. On one hand, the sky rocketing costs of games development means that big players are now more adapted to the market than small publishers. On the other hand, big game companies have a tendency to limit innovation and originality in their quest for the next financial success.
EA has set up a site answering questions about its offer, while Take Two have published the reasons behind their negative answer. On February 25, EA top brass will meet to discuss further action.