EA Drops Take Two Bid
Without enough time to capitalize on this holiday season’s video game rush, the video game publisher’s walk away from the smaller gem prompts questions.
September 15, 2008
Electronic Arts, the Californian video game publisher, dropped its bid for coveted game maker Take Two Interactive Software, triggering a plummet in the target’s shares.
A UBS research report suggested that other buyers likely linger, including publisher Ubisoft, as well as Asian buyers, but each lacks the synergistic potential that EA presented.
Shares of Take Two flopped on the news; in early trading, they fell by as much as 30% to below the $16-per-share range. EA shares fell as well, but only less than three percent, to the high $43-per-share range. EA’s tumble might have been a market aberration that coincided with one of the most anxious days in recent Wall St. investors’ memory.
Analysts felt the drop in Take Two shares warranted their upgrade to a buy; they had been artificially buoyed by EA’s offer, which was well above the level at which they had traded prior to deal talks.
Soleil analysts reminded their readers that Take Two is not in distress, is profitable and lacks debt.
Take Two has been propelled to new heights by its Grand Theft Auto series, a super-shoot-em-up in which the protagonist is a heavily-armed mob sociopath with a very clear disdain for authority figures.
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