EA Offer 2 Billion Dollars For Take 2

Electronic Arts today announced that it has proposed to acquire Take-Two in an all-cash merger valued at approximately $2 billion. Take Two have already declined the proposal, but EA have now released a letter which they hope will lead Take Two shareholder to force a deal to be made.

For those of you who went far in business studies the details of the proposal see EA offering $26 per share in cash represents a premium of 64 percent over Take-Two’s closing stock price on Feb. 15th, and a 63 percent premium over Take-Two’s 30-day trailing average price over the thirty trading days ending on that date.

EA Chief Executive Officer John Riccitiello sent a letter to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two detailing the buy out. However, now that Take Two have rejected the proposal the letter has been released via a newlly opened wesbite to bring attention of the proposal to all Take-Two shareholders.

Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities,” comments Riccitiello in the letter.

The letter went on to warned that further Take-Two delays in accepting EA’s proposal could prevent Take-Two’s shareholders and other constituents from realizing its benefits. “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today,” Mr. Riccitiello wrote.

Our strong preference is to conduct a private negotiation. If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two’s shareholders,” it concluded