EA Abandons Pursuit of Take-Two
After months of trying to buyout GTA publisher Take-Two (with a hostile bid and then friendlier behind-closed-doors negotiations), Electronic Arts today officially walked away from Take-Two. In a brief statement, the company said that while it "continues to have a high regard for Take-Two's creative teams and products, after careful consideration, including a management presentation and review of other due diligence materials provided by Take-Two Interactive Software Inc., EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two."
EA CEO John Riccitiello commented, "EA is tracking toward a record breaking year. We're launching 15 new games including award-winners like Spore, Dead Space and Mirror's Edge, great new titles from the Sims, new family titles with Hasbro, and the highest quality slate of EA Sports titles on this generation of consoles. We're also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online."
As Take-Two has said all along, EA wasn't the only company it's been talking to. Take-Two could still end up being purchased; it just won't be EA.
Strauss Zelnick, Chairman of the Board of Take-Two, stated, "We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders. As part of that commitment, we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives. We're especially proud of the success we've enjoyed over the past eighteen months and we remain confident in our ability to generate value for stockholders."
Ben Feder, Take-Two's CEO, added, "Take-Two's business has continued to strengthen since the time EA first made its offer. We have delivered terrific products to our consumers and we've been rewarded with very strong financial performance. We have an exciting future ahead of us, powered by our profitability, a significant cash position, the absence of debt, an undrawn credit facility and a terrific lineup of games. We are confident in the unique value of our business given our strong position in what is a growing and dynamic industry."
A number of analysts had said they thought EA would eventually prevail in its bid for Take-Two. Wedbush Morgan's Michael Pachter earlier this month said he "remains convinced" that a deal would get done.