Remowned

(Update: T2 chairman Strauss Zelnick has responded negatively to EA’s offer. His stated reasoning is basically the same as mine below. “Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company,” he said. “Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry.”)

Electronic Arts has just announced its desire to acquire publisher Take-Two Interactive–parent company of Rockstar Games and its studios, 2K Boston and 2K Australia (nee Irrational Games) and their new spinoff 2K Marin, Civilization developer Firaxis Games, 2K Sports developers Visual Concepts and Kush Games, etc.–in a $2 billion cash deal that works out to about $26 per share. This apparently is EA’s second offer, after Take-Two rebuffed a $25 per share offer, which already adds a premium of at least 60% to T2’s stock price.

It’s a worrying development. EA CEO John Riccitiello has released an open letter describing EA’s offer and its motivations, which I imagine is intended at least in part to get shareholders (who, again, would stand to earn considerably on their stock) warmed up to the idea in the hope they will encourage T2 leadership to consider accepting.

In my opinion, this would not be the time for T2 to sell, because it seems to recently have gotten something of a second wind. (more…)