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EA Clears FTC Hurdle In Take-Two Bid
Posted by Leigh Alexander at 12:00 AM on July 9, 2008
Electronic Arts has satisfied the Federal Trade Commission's extensive second request for information in the publisher's bid to acquire Take-Two, the company revealed through an SEC filing today - and, pursuant to EA's agreement with the FTC, it won't "consummate" any acquisition before August 21.
That is, unless the FTC finishes its investigation sooner. It's now got the information it needs from EA in its quest to determine possible antitrust issues, but Take-Two has appeared to struggle with fulfiling the broad-ranging request; when it was initially uncompliant, the District Court of Washington, D.C. had demanded it show cause, with Take-Two risking an injunction if it failed to pony up.
However, Tiffany Steckler of EA's corporate communications said that the August 21 timeline applies regardless of what Take-Two does:
"Whatever happens with Take-Two's process doesn't impact [the FTC's] timing, because our agreement with the FTC provides that they complete their review within the 45 days", she said.
Take-Two eventually reached a compromise with the FTC through which it'd be able to provide all the necessary information, but it has yet to fully certify compliance with the FTC, as EA has done as of market close yesterday.
EA's offer still remains at $US 25.74 per share, which for the past several weeks has been slightly below Take-Two's daily average share price — but now, things have changed:
Take-Two is currently trading at $US 23.99, which might make a sale to EA a big gain for shareholders in an economic downturn. Why has Take-Two's price been slumping?
Many analysts had theorised that, once the hype around Grand Theft Auto IV's launch began to ebb, Take-Two's share price would see a gradual adjustment back downward. Prior to EA's offer, the price per share had lingered at about $US 17 before the stock saw a spike largely on anticipation of the offer, and in some part on the strength of GTA IV. But it may be that post-launch for the major title, while at the same time EA's offer appears to hang in compliance limbo, investors are becoming impatient and selling off.
Most likely, though, the lower share price is due to the overall market downturn and concern about oil prices, and has nothing to do with EA's offer, says Wedbush Morgan analyst Michael Pachter. EA, as well as many other companies in the industry, are seeing somewhat lower values as well.
"It's nothing in particular concerning video game stocks", Pachter said. "Take-Two is worth the same, it won't impact EA's offer".
Said a Take-Two spokesperson, "Our position with respect to EA's tender offer remains unchanged. Take-Two's Board is committed to and focused on a process of considering all strategic alternatives to maximise the value of Take-Two. We are considering any and all alternatives which will deliver greater value to stockholders than the current EA offer".
Comments (AU Comments · US Comments)
There are currently no AU comments for this post.
ZeeBeeEss
Posted 12:26 AM 9/7/08
@doc_rob: Gotcha.
@Struct09: That's right, I forgot that little nugget.
ZeeBeeEss
Struct09
Posted 12:14 AM 9/7/08
@ZeeBeeEss: Because they DO want to sell, they just want more money. Take Two has mentioned in the past that they're in talks with more companies than just EA about being bought out.
Struct09
PumpkinPieman
Posted 12:14 AM 9/7/08
I get really tired of EA and their monopoly. I can't really forgive them for what they did to Westwood.
PumpkinPieman
ThursdayNext
Posted 12:11 AM 9/7/08
If EA is offering $25.74 per share how has the trading price slumped to approximately $24? Surely if you are that desperate to offload your shares you just sell them to EA for an extra $1.74 per share.
ThursdayNext
doc_rob
Posted 12:07 AM 9/7/08
If the FTC is investigating you, you have to comply. They's the guv'ment
doc_rob
Luis
Posted 12:06 AM 9/7/08
This is a long drawn out drama that I just don't see ending anytime soon. How will this effect gamers if this does/doesn't happen? Will we get GTA V sooner if the merger happens? Will we not get it if it doesn't? I just fail to see the big picture here.
Luis
Quilt
Posted 12:05 AM 9/7/08
The only things stopping it now is an FTC ruling. You can only beat off an 800 pount gorilla for so long. Eventually your wrists gets tired.
Quilt
Lazlo
Posted 12:04 AM 9/7/08
Wow, this isn't over yet? Does anyone else just not even care anymore?
Lazlo
ZeeBeeEss
Posted 12:03 AM 9/7/08
Why does Take Two have to comply with anything if they do not want to sell? Is there some kind of rule/law within publicly traded companies that this has to happen?
ZeeBeeEss
sitsalot
Posted 12:42 AM 9/7/08
the inevitable is that much closer
sitsalot
BigWyrm
Posted 1:16 AM 9/7/08
@Luis:
Yes, we will get GTA4 sooner if EA acquires Take Two.
Unfortunately, it will most likely be a Teen-rated MMO that resembles the Sims more than any previous GTA. Ads for other EA games will be on every street corner, and additional distasteful in-game advertising will come from NPCs who take the time to tell you about the wonderful product they are currently using (ala The Truman Show).
BigWyrm
Ashurahori
Posted 1:15 AM 9/7/08
For how long is this gonna go on, darn it...?
Ashurahori
Mal-Content
Posted 1:11 AM 9/7/08
EA: MINE! MINE! MINE!! GIMME GIMME! WE WANTS IT!!!!
Ah, who cares. They're EA, they'll get it. Not like we don't give any large corporation whatever it wants anymore.
Mal-Content
phished1
Posted 1:04 AM 9/7/08
@GolGo 13: and the worst part is, every sequel will be the same game, only with slightly different characters.
phished1
GolGo 13
Posted 12:57 AM 9/7/08
@Luis: We'll probably get GTA V, VI, VII, VIII, IX, and X within a month if it happens......
GolGo 13
wild homes gets retconned!
Posted 1:44 AM 9/7/08
@ThursdayNext: You'd really think so, right?
Ah well. Zelnick, you tried. You called EA's bluff, bought yourself some time, and released GTAIV on your own. Unfortunately, just like the market experts predicted, EA's offer had already factored the game's sales in-- and as you haven't really got any other huge properties to launch that are likely to have a tremendous impact on your market value, you'd be wise to take this offer now. Your threats about finding a white knight appear to have been empty.
At least you won't be pilloried forever like Jerry Yang. That guy's going to be run out of town. You'll just be remembered as a quick-change artist. There are worse things.
wild homes gets retconned!
Luis
Posted 1:43 AM 9/7/08
@GolGo 13: @BigWyrm:
I get it now. Much like how EA has Family Play for the Wii, we'll get GTA Family Play. Now you're whole family can take turns getting serviced by a hooker.
Luis
mva5580
Posted 1:38 AM 9/7/08
You drama queens who seriously think EA is going to muck with a mega-ton success like the Grand Theft Auto series need to grow up. They wouldn't change a thing about it.
And on that note, I had a good chuckle at a Gamecrazy a little while back when the guy behind the counter was telling this other customer that if EA acquires Take2, Rockstar will just disband and stop making GTA games. And this idiot was buying it hook line and sinker. It was both hilarious and patheticaly sad at the same time.
It's pretty irritating to realize though that pretty soon, EA Sports is going to be the only game in town. That's going to cause big problems.
mva5580
AndrewG009
Posted 1:32 AM 9/7/08
This has been the drama of the summer. . .someone either get this done or quit it already.
AndrewG009
Brocklesocks
Posted 1:29 AM 9/7/08
Fuck EA. They seriously ruin games and studios. I'd like to see EA's headquarters burn to the ground.
Brocklesocks
wild homes gets retconned!
Posted 1:55 AM 9/7/08
@Brocklesocks: That's true, if you're an alien visitor from ten years ago. EA allows its partner studios a lot of autonomy these days. Bioware, Pandemic-- those guys enjoy a lot of freedom. They still get to make what they want. EA have realised you can have great talent, but if that talent's not making the games they want to make, you've wasted money bringing them into the fold. I don't know why everyone is so stuck in the past. Right now's a pretty good time for EA-- the upcoming library looks nice, with bright spots in the shape of interesting new titles like Mirror Edge and Dead Space-- and their publishing partnerships look pretty nice, too, with fall releases like Valve's Left 4 Dead.
EA might be evil, sure-- but no more evil than any other huge company in this industry. We talk about how they ruin things-- but to say that is to ignore the relative truths of the situation. Is EA hit-and-miss? Yes. But so are all the other companies. Has Activision become much, much worse than EA about turning out sequels-- and arguably about acquisitions? YES. Does Ubisoft have a larger lineup of god-awful kidz titles that barely qualify as games? YES. Is THQ still whoring out movie-licensed titles like there's no tomorrow? Uh huh. We act like EA is the bane of the industry, but to be honest, they've actually gotten a bit better while the rest of the guys have become way more evil.
wild homes gets retconned!
DARTH_TIGRIS
Posted 3:31 AM 9/7/08
Anti-trust inquiry = the great hope for NFL 2KX fans ...
DARTH_TIGRIS
Canuckssleepinthenude
Posted 4:18 AM 9/7/08
@wild homes gets retconned!: You make a good point, I agree. But you forgot skate. :P
Canuckssleepinthenude
Amazon_Chris
Posted 4:58 AM 9/7/08
God damn you EA. EA's motto:
If you can't beat em, buy em.
Amazon_Chris
Does Not Equal
Posted 4:45 AM 9/7/08
By August 21, they mean "until Take Two caves or merges with another company, because we'll just keep extending the deadline."
Does Not Equal
thurauh1
Posted 5:38 AM 9/7/08
No, EA probably won't mess with GTA IV, but it mean that all good customer relations with the fans of Bioshock will be gone --- forever. (imo)
It means that EA will buy Take Two, then force Take Two to use the same version of Securom as Mass Effect is using. EA won't agree to release a revoke tool for activations nor making the limited activation limits go away - ever.
Oh, and EA will kill off Take Two's sports division, then having a monopoly in the Sports Games area...
And that alone should be enough for the FTC not to let this merger happen...
In my mind, EA is and will always be a steam-rolling dragon that tries to take over as much as possible gobbling every developer up it can find. Besides, EA has borrowed 1 billion US dollars to buy Take Two...
It may well be that EA said it has changed it colours. Somehow I doubt it - even if John Riccitiello has delivered a key note speech sdaying exactly these words.
EA+investors still want to see quick returns of their money...
On the other hand, EA has survived in gaming business for more than 25 years....
They must be doing something -- right ??
thurauh1