EA puts pressure on Take-Two board

EA puts pressure on Take-Two board

Buy-out offer extended until 18 April

Electronic Arts (EA) has amended its $2bn hostile bid for Take-Two Interactive, which owns developer Rockstar Games.

The amendments are a direct reaction to the rejection of the initial bid by Take Two's board.

EA made an unsolicited cash offer to buy Take-Two for $26 per share on 13 March. This figure represents a 64 per cent premium over Take-Two's closing stock price on 15 February.

Take-Two's board and a panel of advisors took nine days to reject the offer stating that it was "inadequate in multiple respects and contrary to the best interests of Take-Two's stockholders".

Shortly after formally announcing the rejection, Take-Two instituted a stockholder rights plan, also known as a 'poison pill'.

This enables shareholders to add to their holdings in the event that 20 per cent or more of the company is acquired, or if an existing shareholder who already owns this much buys another two per cent.

EA has now amended its offer requiring that Take-Two scrap this policy, or make it inapplicable to the buyout.

EA has also extended the offer's deadline to 18 April to cater for the rescheduling of the Take-Two annual stockholder meeting.

"The actions of the Take-Two board may increase the risk for their stockholders by delaying a potential transaction," said Owen Mahoney, senior vice president of corporate development at EA.

"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."