We know that Electronic Arts was likely trying to take advantage of the launch of Grand Theft Auto IV with the timing of its acquisition attempts. We know that Take-Two was holding off so that they could take advantage of the higher stock values that would undoubtedly come when GTA IV launched. Now that Take-Two’s stock has risen to $26.63, which is slightly higher than the $26 offer EA had made, Take-Two chairman Strauss Zelnick said in a statement that the increase “vindicates our strategy of waiting until the launch with regard to EA’s offer.”

On the other hand, EA’s Jeff Brown doesn’t believe the change is unexpected and doesn’t really make a difference in his company’s offer to acquire Take-Two. He explained, “We’ve seen a share price above and below our offer and it doesn’t change anything. All of that was factored into our offer of $2 billion.”

A New York Times story infers the two different effects that the increase could have on negotiations between the two companies. Both of them seem quite realistic, so it’s difficult to make an accurate prediction about which way things will turn out.

On one hand, the relatively modest increase in Take-Two’s shares could prompt Electronic Arts and Take-Two to act quickly. Take-Two would theoretically do so because it’s not sure how much more it can expect shares to rise in the short term, and would do so because Electronic Arts can justify to its own shareholders a price increase, given that its current offer is below market.

On the other hand, the increase in Take-Two’s stock could serve to greatly prolong talk of an acquisition. Take-Two might feel the market is just beginning to validate its business and that the stock is only just starting to rise. But Electronic Arts could be intent on sticking with its price and feel that the longer it waits, the more the enthusiasm spawned by GTA IV’s introduction will wear off.

I remain hopeful that Take-Two withstands EA’s attempts, if only to save the NBA 2K series. EA murdered my favorite football franchise, and I’m not going to be pleased if they do the same to my favorite basketball franchise.

via Game|Life

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Electronic Arts announced today that it will be amending its tender offer (which Take-Two rejected) to acquire all outstanding shares of Take-Two stock and will also extend the offer’s deadline from April 11 to April 18. An EA press release cites “the actions publicly disclosed by Take-Two on March 26, 2008, including its adoption of a poison pill and change to the date of its 2008 annual meeting of stockholders to April 17” as the reasoning behind today’s move.

The principal amendments to the offer include:

• EA has added a condition to its offer requiring either (1) that Take-Two’s Board of Directors redeem the preferred stock purchase rights issued as a result of Take-Two’s adoption on March 24, 2008 of the stockholder rights plan, or (2) that EA be satisfied that such rights have been invalidated or are otherwise inapplicable to its acquisition of Take-Two.
• EA has extended its tender offer for all of the common stock of Take-Two until 11:59 p.m., New York City time on Wednesday, April 18, 2008, unless further extended. The offer was previously set to expire at midnight, New York City time, on April 11, 2008.

“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 $26.00 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.”

Take-Two held an investors conference this week which outlined the value of the company, with the underlying message of urging shareholders to not give in to EA’s offer.

And so the dance continues…

When news of Ubisoft’s recent acquisition of the Tom Clancy name along with news of extending the franchises bearing his name and adding an MMO to Ubisoft’s roster, stock for the company jumped 10% .

When the trading bells rang the close of the business day Friday the price was EUR 49.07 ($77.18) giving Ubisoft a company value of EUR 2.24 billion($3,525,088,691.71). But as of this post, the stock prices have now rises to EUR 54.98 ($86.42) which adds over EUR 250 million ($393,437,474.98) to the company value.

When Wedbush Morgan stated that the deal would save Ubisoft over 5 million EUR ($7,787,872.01) per year in royalty fees, this deal also became a gold mine for shareholder who had seen a price drop since February and can now get some slight satisfaction with this rise in stock prices, at least until it peaks or drops again. If I was them I would sell sell sell - or do whatever my broker told me to do anyway. I am not a stock analyst or a broker nor do I own any shares of Ubisoft, I am just greedy like everyone else and need the money.

Thanks: GamesIndustry.biz

We all knew that Ubisoft’s recent acquisitionof the Tom Clancy brand probably cost the company some money, and we knew that this deal would eventually save the company more money in the long run, but according to analyst firm Wedbush Morgan, buying that name has cost the company an estimated 60 million EUR. In American dollars, with current conversion rates, that equals $93,412,411.01.

Wow. That’s a lot of green people, and Ubisoft’s ability to recoup it pretty quickly should not be an issue considering that Rainbow Six Vegas 2 has already shipped 1 million units and is expected to ship 1.7 million for this quarter.

Wedbush Morgan figures that the deal will be paid out in installments over the next three years ad the potential earn-outs will be up to another 15 million EUR ($23,358,681.70). This is expected to save Ubisoft over 5 million EUR ($7,787,872.01) per year in royalty fees.

Either way you slice it though, Tom Clancy is one happy gent. If his bed was not already made of money, it certainly is now.

Via: GamesIndustry.biz

Last week, Electronic Arts CEO John Riccitiello spoke with the New York Times about his company’s offer to acquire Take-Two. He stated that he had not spoken to Rockstar, but claimed that he could make a case for how EA would offer a stable company that could help expand their audience. He even went so far as to say, “We, in many ways, represent a white knight.”

GameDaily spoke with several analysts to get their take on Riccitiello’s comments. Janco Partners’ Mike Hickey was clearly the most strongly opinionated of the bunch, stated, “My belief is Rockstar would be perfectly happy if EA never put a bid in at all. White knight commentary is total bull****, and disrespectful to both the developers at TTWO and the new management team that has already achieved success.”

David Cole of DFC Intelligence doesn’t believe Rockstar is exactly in dire need of help. “I would think with how successful the GTA games have been the issue hasn’t been getting them to a wider audience. The issue is really more about shareholder value and whether EA is a white knight for Take-Two shareholders by offering to pay them the maximum value they feel they can get,” he said.

My archnemesis, Wedbush Morgan Securities’ Michael Pachter, had a different perspective on the matter. “‘White Knight’ usually signifies rescue from a hostile suitor (the connotation is to a damsel in distress). I think Riccitiello’s use of the term was incorrect, and perhaps a misplaced attempt to sound clever. They are in no sense a White Knight.”

Pachter added, “Yes, Rockstar could go it alone, but they don’t own GTA. TTWO owns the IP, and it passes to whoever controls TTWO stock.”

What do you make of Riccitiello’s comments? Are they arrogance or insolence? I believe Pachter is most likely right, because it simply doesn’t make sense – Rockstar isn’t having trouble, so what exactly would they need to be rescued from? And while I do believe there’s a hint of arrogance to what he said, it’s more than likely just a tactic to convince shareholders who might not know any better.

Despite Electronic Arts’ acquisition of Pandemic (along with BioWare) back in November, co-founder and president Josh Resnick says that the company still feels like it’s independent. He told GamesIndustry.biz, “It says Pandemic on the box, we’ve got Pandemic email addresses and we’re making Pandemic games.”

It’s an important declaration for Resnick to make, with an EA takeover of Take-Two looming. Ken Levine has stated previously that he wasn’t concerned by all the talk of acquisitions, but that doesn’t necessarily reflect the opinion of other big name individuals and teams under the Take-Two umbrella, such as Sid Meier and the entirety of Rockstar Games.

“John [Riccitiello, Electronic Arts’ CEO] has said that in the past interfering with the internal studios hasn’t worked for them,” Resnick said. “That’s not the model that EA is now following.

“The model now is to trust your talent, support your talent, give them what they need to do and let them tap into what EA has to offer, which is the fact that they are the best publishing organisation in the world.

“It just doesn’t make logical or business sense for them to change a development studio like that. John and all of the executives at EA have very loudly said that in public. They want to empower their creative talent.”

Certainly sounds like a vote of confidence from Resnick in EA and Riccitiello’s methods. I’ve previously stated that Riccitiello is the type of guy that gamers would want running a company like EA, and so far, it sounds like that has proven to be the case. We’ll see what happens if – but more likely when – Take-Two becomes property of EA.

Never one to be swayed, Electronic Arts has taken another step towards acquiring Take-Two by making a tender offer for all outstanding shares of common stock in the company. The offer is for $26 per share, amounting to a total of $2 billion, which is a 64% increase over where Take-Two’s stock was sitting the day prior to EA’s initial offer to buyout the company according to GamesIndustry.biz.

“This is a great opportunity for Take-Two shareholders,” said CEO John Riccitiello. “We believe Take-Two investors will see our tender offer as the best way to maximise the value of their investment in Take-Two.

“This tender offer provides a clear process to complete the proposed transaction. For EA shareholders, the combination would add additional intellectual properties to our already strong portfolio and welcome Take-Two’s talented creative teams to the great development organisation we’ve built at EA,” he added.

The offer is open until April 11, which still would give EA several weeks of wiggle room prior to the release of Grand Theft Auto IV. Even if this doesn’t manage to get EA into the position they want to be, don’t believe for a second that this is their last attempt at acquiring the company.

Meanwhile, I remain extraordinarily concerned about what will happen to franchises like NBA 2K if and when they acquire Take-Two. You already killed the best football series, EA – don’t do it to the best basketball one, too.

I recently wrote about how Jack Thompson offered to help EA take over Take-Two. Here’s EA’s response to Jack:

Mr. Thompson,

We have received your letter to EA’s shareholder site. In response to your offer to assist in the proposed acquisition of Take-Two, we would strongly prefer that you not get involved in this matter. EA is a strong supporter of creative freedom for game developers. We feel that your past statements - including false claims about content in our games - make any collaboration with you impossible.

Sincerely,
Mariam Sughayer
Sr. Manager Corporate Communications
Electronic Arts, Inc.

There’s really not much to be said about their response other than the fact that EA found a really kind way to tell him off.  Will this be the end of JT and his plans to help EA?  Sadly, I am almost positive this is not the end.

Via Kotaku

There’s been little in the way of developments of Electronic Arts’ proposed acquisition of Take-Two recently – at least publically – but Take-Two’s chairman, Strauss Zelnick, has commented on his optimism on Take-Two’s ability to succeed as an independent company.

“We are very, very excited about interactive entertainment. It’s really the only growth area in the pure entertainment business. That’s why we’re in the Take-Two deal. That will be a really exciting field for the foreseeable future,” he told The Hollywood Reporter.

When asked about the EA deal, Zelnick commented, “We are here for our shareholders. They made a (specific) proposal, we rejected it.” Perhaps unsatisfied with that answer, he was asked if he saw value in consolidation in the games industry. His response:

I think we can expect consolidation. I’d rather not speculate on the nature of value creation. It has a lot to do with the capabilities of individuals and the goals of employees. This is not just a math lesson, this is a creative enterprise. Does consolidation create better games for consumers? Does it create better careers for the creatives? Those questions are just as important. If all stakeholders aren’t taken care of, then none of the stakeholders will benefit. We’ve been at Take-Two only for 10 months and are really proud of the progress we’ve made. And we think this company has a really bright future as an independent company. In the absence of an opportunity that our shareholders value more than this approach, that’s our business model.

Part of me thinks that Zelnick’s building up of Take-Two is simply a method of convincing Take-Two shareholders that the company is worth more than EA has offered. While I personally disagree, I don’t see EA backing down just yet. But for the sake of my love for the NBA 2K series, I really hope they do lay off.

While already the majority shareholder in the company, Infogrames announced this week that it intends to buyout the remaining Atari stock it doesn’t already own. The offer would be for $1.68 per share.

Atari’s board of directors has said that it will take a thorough look at the offer before making a decision. Atari is viewed as a major brand for Infogrames under the new leadership of CEO David Gardner and president Phil Harrison.

I’m going to go out on a limb and predict that this deal will go through (with little to no negotiating on the stock price) and Infogrames will have taken another step forward in their revitalization of the company. I’m excited to see what Infogrames does with Atari and what Phil Harrison has in store for us.

via GamesIndustry.biz

The games industry currently seems to be obsessed with the idea of merging and making acquisitions, but Sega’s Simon Jeffrey says that the house that built Sonic isn’t interested in any of it.

Speaking with Reuters, Jeffrey said, “We’re moving very nicely up the charts but we are also very cognizant of what is happening at very top end of market, with regards to some of the M&A activity.”

The Sega US head honcho said that the company is happy with where it is right now. “That’s not an area we want to play in right now. We have no interest in being acquired, we are very happy with our position right now,” he stated.

“There is plenty of room for smaller companies to be successful and profitable in this business. You don’t have to be number one or number two. You can be number six very happily,” he said, referencing the fact that Sega is the number six publisher in North America, according to NPD.

He brings up a good point, in that there’s really no need to compete with Activision and EA for that number one spot when there’s plenty of room left to occupy. Not only that, but by remaining independent, the company is free to make uninhibited choices with regards to its future.

via GamesIndustry.biz

Systemax, Inc. (NYSE Symbol: SYX) is purportedly in negotiations to purchase the CompUSA brand and possibly many of its remaining assets. If things pan out, Systemax will not only acquire the CompUSA brand, but also its trademarks, e-commerce business and as many as 16 retail stores. This news may come as a surprise to many that had already passed off the ailing CompUSA as dead. Systemax could very well be the savior of the CompUSA namesake.

According to Reuters, the deal could reach as high as $30 million - depending largely on which locations Systemax decides to take over.

“We believe the value of the CompUSA brand remains very high,” Systemax Chief Executive Richard Leeds said in a statement. “We view this acquisition as a strong complementary business to our TigerDirect operation.”

Subsidiaries and divisions of Systemax, Inc. include SystemaxPC, Tiger Direct, Global Industrial, Misco, Infotel, Global Computer Supplies, OnRebate, Hellcat, and Ultra.

With such a strong background in custom PC configurations and component sales, perhaps Systemax will succeed where CompUSA failed - making CompUSA into the definitive walk-in computer store.

Being an avid PC hardware geek, I find myself often avoiding such competitors as Wal-Mart, Best Buy, & Circuit City simply because they treat computer hardware (& often software) as niche. I’ve honestly found more frustration and annoyance when shopping at such locations in comparison to dedicated stores such as CompUSA. When I heard news that a nearby CompUSA location was preparing for closeout, I had dread the thought of relegating my PC related purchases to strictly online. It’s not that online stores are bad in any way. Being able to physically see a product prior to purchase always has its advantages. Plus, returning a defective product locally is generally less painful than the typical online RMA process.

Here’s hoping that my CompUSA location is on Systemax’s target list. Yes, I’m selfish that way.

Via Reuters

You may recall that back in November, Moscow’s 1C Company acquired Akella’s “Sea Dog” in-house development studio, and now we receive word that 1C has also purchased Russian developer Ino-Co, the team behind Fantasy Wars and Star Wolves. The studio will be renamed 1C: Ino-Co, and the good news is that they are currently working on a Fantasy Wars sequel titled Elven Legacy, which is slated for release sometime in 2008 and are working on two other projects as well.

This new acquisition has buffed up the 1C Company’s game portfolio which also includes the IL-2 Sturmovik, Pacific Fighters and Theatre of War titles. With a PC publishing division based in Prague, a deal to publish titles for Atari and joint ventures with Fireglow Games, the 1C Company is definitely one Central and Eastern European publisher whose star just keeps getting bigger and brighter.

Thanks: GamesIndustry.biz

See, acquisitions aren’t all bad – while most moaned and groaned over the recent acquisition of BioWare and Pandemic by EA, it’s opened some new potential avenues. One that I find particularly interesting, which analyst Michael Pachter speculated on was that BioWare could be given the reigns to do the next RPG based on the Lord of the Rings license, which EA owns the rights to. Given the lack of success prior attempts EA has made at it, BioWare could certainly bring some credibility to the table.

From Business Week:

According to Michael Pachter, a Wedbush Morgan Securities analyst, BioWare’s prowess at designing and producing role-playing games—both original and franchise-based—could help jump-start EA projects that have so far been stuck in the mud. A prime candidate is Lord of the Rings: the White Council. “EA hasn’t been able to get it right for two and a half years now,” says Pachter. “But if BioWare takes it over, it should do very well in the marketplace,” he adds, citing the company’s previous hits with titles based on the Star Wars films, which could prove helpful for taking on Tolkien.