Pachter: Take-Two Buyout "Inevitable"
Ever since EA made it clear they wish to acquire Take-Two Interactive, most analysts have agreed that the handwriting is already on the wall. Take-Two declined the offer at the time, but things could change...rapidly.
EA made a tender offer of $26/share yesterday morning, which caused Take-Two management to warn its shareholders of accepting the offer for "at least 10 working days." But according to the Videogaming247 blog, Wedbush Morgan analyst Michael Pachter said they only did this to see if more offers will arrive in the next week. However, in the end, a sale is "inevitable."
“I think Take-Two hopes that a competing offer may surface,” he added. “This hope is somewhat naïve, given that the whole world has been aware of EA’s overture for the last 18 days, and no interested parties have surfaced. In my view, EA is in a unique position to pay all cash and consolidate Take-Two’s operations into its own while eliminating most of the overhead. Other video game companies could do the same on the operations side, but none have the cash. No media company could gain the operating synergies. So there will not be any other purchasers.”
At this point, it seems to be only a matter of time...how much longer can Take-Two resist EA and its very deep pockets? Answer- probably not long.
3/13/2008 Ben Dutka