A tender offer of $26 per share will be made directly to shareholders following the rejection by Take Two's directors of last month's equally priced takeover bid.
The Wall Street Journal has learned that Electronic Arts is continuing to pursue a takeover of Take-Two Interactive, following up last month's $26 per share offer that was rejected by Take-Two's board of directors with a tender offer to shareholders at the same price.
The move to circumvent Take-Two's board of directors and approach shareholders directly marks an appreciably hostile turn in EA attempts to complete their latest acquisition. The board has urged shareholders to take no action at this time pending its review of the offer.
Previously, it has maintained that the EA bid is of insufficient value to be accepted, and has decried its timing in relation to the April release of Grand Theft Auto IV as opportunistic.
The offer is said to expire at midnight April 11, a day after Take-Two's annual shareholders meeting. Analysts project that there will likely need to be an increased offer to complete a takeover in the near term, and also that EA may walk away in the hope of a less costly acquisition down the road if shareholders stand their ground looking for a higher price.
When EA initially made its advances public, the $2 billion valuation of Take-Two constituted a 50% premium over the closing price of the company's shares. Subsequently, shares have been trading for around (and briefly above) the $26 level, and are expected to spike upwards again with the release of GTA IV.
In publicly divulged correspondence with Take-Two, EA contends that the market currently reflects expectations of strong sales for GTA IV, hence its valuation is fair and the deal should be made prior to the April 29 launch date. Take-Two's directors have pledged to further discuss any offers only after that date, also noting that other suitors have approached them since EA's bid was made public.