Analyst: Take-Two Now Very Attractive To Possible Buyers
When you show you're more than a one-trick pony, potential buyers become interested.
Back in 2008, Take-Two Interactive was a highly sought-after commodity after Grand Theft Auto IV hit big. Electronic Arts tried to pick them up but after an elongated negotiation, the bid fell through as Take-Two believed they were being undervalued. But after last year's blockbuster (Red Dead Redemption) and what appears to be another non-GTA winner this year (L.A. Noire), Take-Two is once again ripe for the picking. Or at least, that's what Sterne Agee analyst Arvind Bhatia told IndustryGamers:
"Whether GTA V is released in late FY12 or a few months later, i.e., in early FY13, should not materially change the company’s intrinsic value. Besides, Take Two investors know that the risk of game delays and the accompanying earnings volatility is inherent to their investment in this stock. What should be more important is that with the strong launch of L.A. Noire last week, Take-Two has created yet another valuable franchise. As we have said, we think the company has now made a strong case for generating average annual EPS of $1.00 going forward ($1.35 ex the MLB contract that expires in 2012). With the GTA catalyst still ahead and the possibility of a takeout still a reasonable bet, we are reiterating our $19 price target which is based on our sum-of- the-parts valuation."
Yeah, GTAV is coming and so is Bioshock Infinite, so Take-Two certainly appears attractive. But whoever wants to buy 'em has to come with the cash; EA offered $2 billion back in '08 and that didn't fly, so...
5/24/2011 9:31:25 AM Ben Dutka