Electronic Arts reiterated this morning that its $US2 billion buyout offer for Take-Two is not based on the company's short term valuation, and neither is it affected by the performance of a certain single franchise (guess which?).
Yesterday Take-Two's stock nudged up over $US26 per share, a higher value than EA's $US25.74 per-share bid. But EA's Mariam Sughayer, senior manager of Corporate Communications, says the company's looking further down the line — despite predicting that GTA IV is the likely contender for game of the year.
"We believe our offer is based on the long-term valuation of the people and franchises that make up the TTWO - not a one-time event within an important franchise," Sughayer said. "In addition — we believe that TTWO's price prior to our offer already reflected that this would be a global blockbuster - the stock was trading at approximately $17."
She added, "We expect GTA IV will be a huge blockbuster - and #1 game of the year."
As of market open on launch day, though, Take-Two has not seen any further resurgence in its share price, sticking firmly within the range of $26-and-change. This lends credence to the argument put forth by EA and many industry analysts that the highly-anticipated commercial success of GTA IV is already reflected in the share price.
Cowan Group analyst Doug Creutz agrees, commenting, "We expect the release of the game to have a minimal impact on TTWO share price, as it continues to be driven by arbitrageurs on the likely outcome of the outstanding Electronic Arts tender offer."
Take-Two has said multiple times that it wouldn't entertain any discussions on a potential acquisition until after the launch of GTA IV — which means the two companies could sit down and confab together as soon as tomorrow.
For his part, Creutz believes the acquisition is likely regardless of how GTA IV sells, if EA raises its offer a little: "We continue to believe that the most likely outcome is a sale price in the $28-30 range, and do not believe that the success of GTA IV is likely to impact this meaningfully," he says.