EA and Take-Two Interactive start talking to each other
After months of a hostile-takeover stand-off, Take-Two Interactive Software said today that it expects to sign a confidentiality agreement with Electronic Arts. That means the two can start talking seriously about evaluating “strategic alternatives” that might result in an investment or purchase of Take-Two, which has the hottest property in games, Rockstar Games, the maker of “Grand Theft Auto IV.”
EA is also expected to let its $2 billion tender offer expire tonight at midnight Eastern time. Stauss Zelnick, chairman of Take-Two, said in a statement that the company can now make a presentation to EA’s board with confidential Take-Two information for the first time since early 2007. He said his board still believes the $25.74 a share bid is inadequate. Ben Feder, chief executive of Take-Two, said that his company is still talking to others.
On Friday, EA CEO John Riccitiello called Zelnick to talk about getting fresh information from Take-Two, since EA’s original offer was based on assumptions that are now out of date. EA also expressed concern that it would not be able to execute a merger deal by the important 2008 holiday game sales season. Riccitiello voiced his concerns in a follow-up letter this morning. The letter notes that EA expects the Federal Trade Commission to expect its antitrust review by Aug. 21. EA expects a favorable outcome from that review.
Clearly, these two powerhouses are moving a step closer to a deal. They really need to break the impasse, since Activision Blizzard, formed by the $18 billion combination of Vivendi Games and Activision, is now the biggest company in video games.
Next Story: Google releasing public Android SDK today? [Confirmed]
Previous Story: A123 and Imperium exemplify the boom and bust of cleantech
About the Author, Dean Takahashi
Dean is lead writer for GamesBeat at VentureBeat. He covers video games, security, chips and a variety of other subjects. Dean previously worked at the San Jose Mercury News, the Wall Street Journal, the Red Herring, the Los Angeles Times, the Orange County Register and the Dallas Times Herald. He is the author of two books, Opening the Xbox and the Xbox 360 Uncloaked. Follow him on Twitter at @deantak, and follow VentureBeat on Twitter at @venturebeat.