Shrygue
March 26th, 2008, 17:19
via Gamedaily (http://www.gamedaily.com/articles/news/taketwo-board-rejects-ea-offer-still-exploring-merger/?biz=1)
Following up on EA's hostile buyout attempt, Take-Two Interactive's Board of Directors today announced that it has "unanimously determined" that EA's $26 per share offer is" inadequate in multiple respects and contrary to the best interests of Take-Two's stockholders." The Board has recommended to shareholders not to tender any shares to EA.
That said, Take-Two has not completely ruled out a deal with EA. The Board said that "it will explore alternatives to maximize value for stockholders, which may include a business combination with third parties or with EA, remaining independent, or other strategic or financial alternatives that could deliver higher stockholder value than the current EA offer."
EA desperately wanted to complete a deal before the highly anticipated release of GTA IV (Take-Two called it "opportunistic"), but Take-Two's Board said that its process "for considering strategic alternatives" and for discussing business combinations with third parties would have to take place after the release of the game (April 29). "The Board continues to believe that the Company will be best positioned, from the perspective of both value and timing, to conduct such a review at that time," Take-Two said. Take-Two once again also indicated that it's received further interest from other parties besides EA but that no "substantive discussions have yet occurred."
"Take-Two's Board of Directors and senior management team were put in place less than one year ago with one mandate: maximize stockholder value. We have maintained a single-minded focus on that goal ever since and it remains the guiding principle in every decision we make with regard to Take-Two. Our Board, after careful review, has unanimously determined that Electronic Arts' offer continues to provide insufficient value and remains opportunistically timed to capture the value of the upcoming Grand Theft Auto IV launch at the expense of our stockholders," commented Strauss Zelnick, Chairman of the Board of Take-Two.
He continued, "With one of the strongest portfolios of intellectual property in our business, a superb creative and business team, and a revitalization plan that is beginning to deliver results, Take-Two is uniquely positioned to create stockholder value in an industry that is enjoying the highest growth rates of any entertainment medium. We are effectively working toward a process to review all available options to maximize this value, either as an independent company or in combination with a third party, and are open to beginning informal discussions starting now. Our stockholders' interests would hardly be served by accepting an offer from EA at the wrong price and the wrong time. As a result, the Board recommends that stockholders not tender any of their shares to EA."
Take-Two's Board today also adopted a new Stockholders Rights Agreement "to protect stockholders against, among other things, unsolicited attempts to acquire control of the Company at an inadequate price for all stockholders or are otherwise not in the best interests of Take-Two and its stockholders." Take-Two acknowledged that this agreement was adopted in direct response to the EA tender offer.
According to the release: "...the rights will become exercisable if a person becomes an "acquiring person" by acquiring 20% or more of the common stock of Take-Two or if a person commences a tender offer that could result in that person owning 20% or more of the common stock of Take-Two. The Stockholders Rights Agreement will not apply to existing stockholders who own 20% or more of Take-Two's existing common stock, unless and until they acquire an additional 2% of Take-Two's outstanding common stock."
[UPDATE] You can read analyst Michael Pachter's commentary on the rejection by Take-Two and why he thinks Take-Two made a mistake by clicking here (http://www.gamedaily.com/articles/news/pachter-taketwo-has-made-a-mistake/?biz=).
Following up on EA's hostile buyout attempt, Take-Two Interactive's Board of Directors today announced that it has "unanimously determined" that EA's $26 per share offer is" inadequate in multiple respects and contrary to the best interests of Take-Two's stockholders." The Board has recommended to shareholders not to tender any shares to EA.
That said, Take-Two has not completely ruled out a deal with EA. The Board said that "it will explore alternatives to maximize value for stockholders, which may include a business combination with third parties or with EA, remaining independent, or other strategic or financial alternatives that could deliver higher stockholder value than the current EA offer."
EA desperately wanted to complete a deal before the highly anticipated release of GTA IV (Take-Two called it "opportunistic"), but Take-Two's Board said that its process "for considering strategic alternatives" and for discussing business combinations with third parties would have to take place after the release of the game (April 29). "The Board continues to believe that the Company will be best positioned, from the perspective of both value and timing, to conduct such a review at that time," Take-Two said. Take-Two once again also indicated that it's received further interest from other parties besides EA but that no "substantive discussions have yet occurred."
"Take-Two's Board of Directors and senior management team were put in place less than one year ago with one mandate: maximize stockholder value. We have maintained a single-minded focus on that goal ever since and it remains the guiding principle in every decision we make with regard to Take-Two. Our Board, after careful review, has unanimously determined that Electronic Arts' offer continues to provide insufficient value and remains opportunistically timed to capture the value of the upcoming Grand Theft Auto IV launch at the expense of our stockholders," commented Strauss Zelnick, Chairman of the Board of Take-Two.
He continued, "With one of the strongest portfolios of intellectual property in our business, a superb creative and business team, and a revitalization plan that is beginning to deliver results, Take-Two is uniquely positioned to create stockholder value in an industry that is enjoying the highest growth rates of any entertainment medium. We are effectively working toward a process to review all available options to maximize this value, either as an independent company or in combination with a third party, and are open to beginning informal discussions starting now. Our stockholders' interests would hardly be served by accepting an offer from EA at the wrong price and the wrong time. As a result, the Board recommends that stockholders not tender any of their shares to EA."
Take-Two's Board today also adopted a new Stockholders Rights Agreement "to protect stockholders against, among other things, unsolicited attempts to acquire control of the Company at an inadequate price for all stockholders or are otherwise not in the best interests of Take-Two and its stockholders." Take-Two acknowledged that this agreement was adopted in direct response to the EA tender offer.
According to the release: "...the rights will become exercisable if a person becomes an "acquiring person" by acquiring 20% or more of the common stock of Take-Two or if a person commences a tender offer that could result in that person owning 20% or more of the common stock of Take-Two. The Stockholders Rights Agreement will not apply to existing stockholders who own 20% or more of Take-Two's existing common stock, unless and until they acquire an additional 2% of Take-Two's outstanding common stock."
[UPDATE] You can read analyst Michael Pachter's commentary on the rejection by Take-Two and why he thinks Take-Two made a mistake by clicking here (http://www.gamedaily.com/articles/news/pachter-taketwo-has-made-a-mistake/?biz=).