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Take-Two Interactive urged shareholders Wednesday to reject a bid by
the world's biggest videogame maker Electronic Arts, which is bent
on capturing hit games "Grand Theft Auto" and "Bioshock."
EA made its offer to Take-Two stockholders after
the company's board of directors rejected its offer in February as
too low given the firm's blockbuster titles and ownership of hot
video game creator Rockstar Games.
"Our stockholders' interests would hardly
be served by accepting an offer from EA at the wrong price and the
wrong time," Take-Two board of directors chairman Strauss
Zelnick said in a statement.
"As a result, the board recommends that
stockholders not tender any of their shares to EA."
Take-Two stock was trading near the
17-dollar-per-share mark when EA made its original offer of 26
dollars per share to the board of directors. The offer is valued at
2.0 billion dollars (1.28 billion euros).
"It is regrettable for stockholders that
Take-Two's board of directors has not accepted EA's offer," the
California company said in a written response to an AFP inquiry.
"EA believes that a combination of EA and
Take-Two is in the best business interest of all parties."
EA said its all-cash offer is "full and
fair, and reflects the value of Take-Two's intellectual properties,
talent, and operational progress."
Take-Two shares rose 0.35 percent Wednesday to
25.91 dollars while EA fell 1.4 percent to 49.46 dollars.
Take-Two's board is enacting a series of
measures to thwart what it sees as a hostile takeover bid by EA.
Board members created a new series of preferred
stock and delayed its annual stockholders meeting to April 17,
gaining time to devise a plan to appease investors in favor of the
EA offer and avoid being ousted in an EA coup.
Take-Two said it is exploring possible mergers
or alliances with other companies and "financial alternatives
that could deliver higher stockholder value than the current EA
offer."
Take-Two says it is open to discussing options
with "any parties," including EA, after Grand Theft Auto
IV is released in late April.
The release of the latest GTA title was delayed
from last year, disappointing fans and investors.
GTA is one of the most popular computer games on
the market, but also among the most controversial because of its
violent nature. Players score points with acts such as carjacking
and killing prostitutes or police officers.
"GTA:4" has received positive advance
reviews and is expected to be a sales blockbuster. EA argues that
enthusiasm over the game was already factored into the stock price
by the time EA made its offer, which expires April 11.
EA wants to acquire Take-Two and its lucrative
titles in time for the year-end holiday shopping season.
"For the life of us, we can't figure why
this would be the wrong time to talk about our offer," EA
spokesman Jeff Brown told AFP in an interview earlier this month.
"Our timing is driven by the idea that the
value of this asset erodes significantly with time. If we sign a
deal by spring or summer and publish their titles by holiday 2008,
it is very valuable."
Take-Two contends the offer does not properly
value the company's game makers and painfully restructured
management.
Take-Two has gone through a half-dozen chief
executives, with the most recent executive put in that post a year
ago by stockholders upset by the firm's legal and financial woes.
Rockstar title "Manhunt 2" earned
notoriety last year by being banned in Britain, Ireland and Italy
and yanked from shelves of a major retail chain in the United
States, where it got a damning "adults-only rating."
The makers of the game featuring blood-spattered
scenes in an asylum won an appeal against British censors that said
it demonstrated "casual sadism" and an "unrelenting
focus on stalking and brutal slaying".
Take-Two's freshly released "Bioshock"
title featuring morally-disturbing choices and genetic weaponry has
been heaped with awards and praise from gamers, promising to be
another hit for the company.
-- AFP
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