Phil Elliott
13:52 (BST)
17/06/2008
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EA re-extends offer; Take-Two still unimpressed
Electronic Arts has announced that it is extending its tender offer for outstanding shares in rival publisher Take-Two until July 18, for the same price of USD 25.74 as the previous offer which expired last night.
In response the Take-Two management has issued a press release stating that the offer still undervalues the company and that it's not in the best interests of shareholders.
In all the release of the respective statements is a process which effectively amounts to a "nothing has changed" scenario - EA is still intent on purchasing Take-Two, and Take-Two is still intent on resisting those advances.
"Our offer price remains unchanged at USD 25.74 per share, which is a substantial premium to where Take-Two's stock was trading prior to our offer," Owen Mahoney, senior VP of EA corporate development had initially said in a statement. "We congratulate Rockstar on the successful launch of Grand Theft Auto IV but believe our offer reflects a full and fair price based on the long-term value of Take-Two's entire operation."
Which led Strauss Zelnick, chairman of Take-Two, to respond: "The latest extension of EA's unsolicited, highly conditional tender offer does not alter the fact that their proposal still significantly undervalues Take-Two, a fact that is reflected in the overwhelming number of stockholders who still have not tendered their shares.
"Our board of directors remains in unanimous agreement that the proposal is contrary to the best interests of Take-Two stockholders, and the board continues to recommend that stockholders not tender their shares to EA. The board remains focused on the strategic process that began formally on April 30 to consider all alternatives to maximize value. We believe that these alternatives, which may include a business combination or remaining independent, will deliver greater value to stockholders than the current EA offer."
And Ben Feder, Take-Two CEO, added: "Take-Two's vast potential to create and enhance stockholder value has become even more evident in recent weeks, with the runaway success of Grand Theft Auto IV, a product pipeline that is one of the strongest and most creative in our history, and continued operational and financial progress. We believe that any alternative we consider must fully reflect the value we are creating and capture that value for the benefit of our stockholders."
The process has rumbled on since the original USD 2 billion offer was made in February this year. Meanwhile, the completion of the Activision Blizzard merger is set to go ahead - without any significant issues - on July 8.
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