Maybe something doesn’t have to give after all. EA has extended the expiration date for its bid to acquire Take-Two, while the Federal Trade Commission continues its investigation. Though EA recently certified its compliance with the FTC’s broad-ranging request for information, the publisher reached an agreement with the FTC through which it promises not to complete any acquisition until August 21.
At this point, the extension is merely a formality, to allow the bid to remain outstanding until the investigation concludes. The new bid deadline is now August 18, which means it’s a safe bet we’ll see at least one more extension at that time, since any EA move needs to be after the 21st.
EA’s $2 billion tender offer remains the same, at $25.74 per share. Take-Two’s stock has seen a minor decline in recent weeks, though, after spending many weeks trading at a somewhat higher valuation than EA’s offer. Either due to the drop-off in GTA IV-related investment or due to an overall downturn in the economy, Take-Two currently trades at about $25 per share, apparently making EA’s offer attractive to investors.
Almost twice the number of Take-Two shares have been tendered to EA since the last bid extension — EA has now been sold 11,741,339 shares by Take-Two investors, as opposed to 6,139,824 about a month prior. Still, it only represents about 15% of the whole, far from the majority EA needs, but it does point to the looming fact that more investors may be ready for a sale.
Take-Two board chairman Strauss Zelnick reiterated his monthly recommendation that shareholders not tender their shares, while stating again that other, unspecified parties are interested in acquiring the company.
“We are fully engaged in a formal process to evaluate strategic alternatives that have the potential to deliver greater value than EA’s inadequate offer,” said Zelnick. “As part of this process, we continue to engage in meaningful discussions with multiple parties, a number of whom have been conducting due diligence. We also remain absolutely focused on executing on our strategic and business objectives.”
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