EA withdraws Take-Two bid, stock tanks
San Mateo (CA) – Electronic Arts has dropped its hostile takeover bid of Take-Two Interactive. The two companies have been going back and forth on bids for nearly seven months with Take-Two saying that it was being undervalued by EA. As you can expect, Take-Two’s stock price has dropped nearly five dollars and is currently trading at just under $17 a share.
Despite the failed EA bid, Take-Two is still exploring options with other companies. In a prepared statement, Take-Two’s Chairman, Strauss Zelnick, said, “we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives.”
During the bidding war, Take-Two has consistently said that EA wasn’t willing to pay enough money. The company is still basking in the success of its hit game, Grand Theft Auto 4 and another of its games Bioshock will be turned into a feature film. GTA 4 has sold over 10 million copies and broke records for the highest grossing game with more than $500 million in sales in the first week of release.
Electronic Arts possibly withdrew its bid because of the problems it is having with the Spore video game. Gamers have complained that the game doesn’t fully meet expectations - Spore was tremendously hyped up in recent months with the launch of the Creator Creator and its own YouTube channel. Additionally, there is a geek revolt against Spore’s DRM which requires the user to authenticate to the Internet.
As we’ve previously seen, trying to stop something, especially piracy, just riles up people even more and Spore could likely be the most pirated game in history. Bittorrent trackers on thepiratebay.org show 7000 seeders and 20000 leechers of Spore while btjunkie.org has one tracker with 19000 seeds and 49000 leechers.
Take-Two is traded on the NASDAQ with the symbol TTWO. It closed Friday at $21.89 a share and opened Monday morning at $15.89. The stock has gained slightly in the past few hours and is currently sitting at $17.06 a share (12:00 PM Pacific). Electronic Arts’ stock is down approximately 2.6% to $43.80/share.