EA amends its offer for Take-Two, adds condition

The leading video game publisher Electronic Arts Inc. said Friday it extended its tender offer for Take-Two Interactive Software Inc. by a week to April 18. EA’s move to amend its $26 per share, or $2 billion offer for Take-Two came after the latter company rescheduled its annual shareholders meeting.

On Wednesday, New York-based Take-Two pushed back its annual shareholder meeting by a week to April 17, which means EA's offer for Take-Two is now set to expire on April 18 instead of April 11.

Besides amending its tender offer, Redwood City-based EA added a condition to its offer requiring that Take-Two's board take action to scrap a shareholder-rights plan, also known as a poison pill, it adopted earlier in the week.

EA said it would lower its per-share bid to $25.74 from $26 if the company’s shareholders adopt the proposed poison pill plan.

"The actions of the Take-Two board may increase the risk for their stockholders by delaying a potential transaction," Owen Mahoney, EA's senior vice president of corporate development, said in a statement. "We continue to believe that our $26 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."

However, the maker of the highly popular "Grand Theft Auto" video-game series, on Wednesday, rejected EA’s second and more aggressive buyout bid saying that the $26 per share price tag is too low, and is not in the best interests of its stockholders.

Earlier in the week, Take-Two urged the stockholders to reject rival company's offer but said it would be open to discussion after the release of GTA IV, the fourth version of the "Grand Theft Auto" video-game series that has sold 65 million copies and is considered one of the most successful video games in history.

According to Take-Two Chairman Strauss Zelnick, the 180-day "poison pill" would make it certain that the Take-Two board has sufficient time to consider all strategic alternatives for maximizing value for company’s shareholders. “The agreement will not, and is not intended to, prevent a takeover of the company on terms that are fair to and in the best interests of all stockholders," Zelnick said.

About 5,000 shares of Take-Two have so far been tendered, EA said in its statement. As on Dec. 14, the company had 74.3 million shares outstanding.

EA, the maker of “Need for Speed” racing and “Madden” football games, approached Take Two with a $26-a-share offer on Feb. 19 after the company rejected its initial offer worth $25/share on Feb. 15. The latest offer is 64 percent higher than the Feb. 15 closing price of $15.83, the last day of trading before the proposal was made.

EA intends to acquire Take-Two before it releases what is widely expected to be the top-selling game of 2008, the Grand Theft Auto IV, which was originally slated for release in the October last.

Grand Theft Auto IV, the next installment of the "Grand Theft Auto” franchise that will be available for Microsoft's Xbox 360 video game console as well as Sony's PlayStation 3 will now hit the market shelves in fiscal 2008's second quarter, which ends in April 2008.