Take-Two Spent Over $11 Million To Defend Against EA Takeover
See Full ImageMost gamers were happy to see Take-Two Interactive fend off Electronic Arts' takeover attempts earlier this year; it was like rooting for David vs. Goliath and it seemed like the right thing to do. But business isn't always so simple.
According to GameDaily, Take-Two spent around $11 million in fending off EA during the larger publisher's advances. EA was offering $25.74 per share while Take-Two continually maintained they were worth more than that, and as evidenced by a recent SEC filing, Take-Two spent that large chunk of cash to defend themselves. So said a Take-Two representative, the $11 million in costs was "related to the EA offer and our strategic review process." Now, some will say it was well worth the cost to remain independent and keep EA away, but don't tell that to Take-Two investors. The Grand Theft Auto publisher posted a $15 million loss for the fourth quarter, and that stock that was once north of $26/share (just after GTAIV launched), is now trading at just over $8/share. ...EA's $25.75/share offer isn't looking so bad now, is it? Of course, Take-Two does expect to rebound once more of their blockbuster titles hits shelves in 2009, but for the time being, investors aren't likely to be happy with the decision to defy EA. Then again, hindsight is always 20/20.
For the time being, the economy is causing a few problems for most publishers, so that certainly affects Take-Two to some extent. But on the other hand, one can only wonder where everyone involved would be if Take-Two had accepted EA's bid...
12/22/2008 John Shepard
Put this on your webpage or blog:
Email this to a friend
Subscribe to John Shepard on Twitter
