According to at least one business news source the CBS buyout of CNet is part of growing trend involving companies trying to reach gamers. It’s all about demographics.

In the case of CBS-Cnet, the so-called synergies lie in core demographics. By the very nature of Cnet’s tech focus, its audience features the increasingly hard-to-reach 18-to-34-year-old men who prefer ”Grand Theft Auto IV” and ”Indiana Jones” to TV viewing — unless there’s a ball game on, of course.

The article mentions the recent Blockbuster offer to Circuit City and Microsoft’s attempted hostile take over Yahoo! as well. The common theme is the growing influence of gamers on the economic market. Yes gamers we shall rule the world! It’s only a matter of time.

via The Deal.com

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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.

Take-Two is facing yet another lawsuit, but this time it’s by shareholder. Filed last Friday, Take-Two shareholder Patrick Solomon alleges that the “outright rejection of EA’s offers and failure to negotiate” are a failure to “reasonably respond” and “maximize shareholder value.” It’s also alleged that the buyout offer was kept secret (albeit only for a short amount of time) in order to benefit executives.

ZelnickMedia partners Strauss Zelnick and Benjamin Feder are named in the lawsuit, which is focusing on a certain move made last month shortly before the EA offer was rejected. In the event that the company were bought out, Zelnick and his partners would stand to receive a significant bonus.  At the time I referred to the move as “unsavory,” which is a sentiment which Solomon obviously agrees with.

GamesIndustry.biz is reporting that Take-Two released a statement saying, “We believe that the claims lack merit, and intend to defend vigorously against them.”

Even though it seemed inevitable, I’m glad to see this is indeed going to court. It’ll be interesting to see how the case turns out and what impact it might have on a potential buyout of Take-Two.

image via The Infinite Monkey Project

Just because we haven’t heard much more in the way of offers since Electronic Arts’ original bid to buyout Take-Two doesn’t mean that there aren’t wheels spinning. Earlier this month, Take-Two formed a severance plan to put the minds of employees at ease. The severance package would insure that any employees or executives that were fired without reason following a takeover would continue to be paid – up to six months’ salary for non-execs, while the suits would get up to 1.5 times their salary and bonus for up to 18 months.

Top executives such as Take-Two chairman Strauss Zelnick would not be impacted by this, as they’re already covered by a separate plan, according to Reuters.

“The bid probably created fairly large internal disruption and without a severance plan, employees are worried about losing their jobs,” said Janco Partners analyst Mike Hickey. “They want to keep people focused and give them some sort of support.”

So it would seem Take-Two is taking care of its employees, but that remains to be seen if stockholders are receiving positive treatment as well.

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

We know that Take-Two is a hot commodity in its own way (you have to keep in mind the company’s inability to generate a profit recently), so why is Activision not challenging EA with a Take-Two buyout proposal of their own? Speaking at the Goldman Sachs Technology Investment Symposium 2008 Conference (phew), Activision’s chairman and CEO Bobby Kotick explained that the company didn’t meet Activision’s criteria.

“I think we’ve had - as we’ve said for a very long time, now - well-stated criteria for what we’re interested in in an acquisition,” he said.

“We’ve said that we need a history of profitability, good management, the proprietary technology for a franchise, history of multimillion unit sellers. They would have to be non-dilutive and operating margin accretive.

“And, for us, Take-Two didn’t fulfill those requirements. Maybe it does over the long-term for EA, but it doesn’t for us.”

Kotick believes that his company’s competitors might be reacting to Activision’s merger with Vivendi. (Similar to what NBA fans might have seen happen in recent weeks.)

With the potential for Rockstar to jump ship in 2009 and Take-Two’s struggles, I can’t say I blame Kotick or Activision for being uninterested. With the merger they’ve made with Vivendi, Activision Blizzard seems to be poised to dominate the industry as it stands.

via GamesIndustry.biz

I really don’t care for backdoor deals and things that would fall under the umbrella of “unsavory,” so allow me to paint the picture for you with that in mind.

An 8-K filing with the SEC on February 14, Take-Two proposed some changes to its deal with ZelnickMedia, a company owned by Take-Two chairman Strauss Zelnick. Among these changes was a boost in pay for ZelnickMedia (from $62,500 to $208,333 per month), an annual bonus increase (from $750,000 to $2.5 million) and, best of all, a grant of 600,000 shares of restricted stock that will vest over three years – that is, unless, the company is acquired, which would cause the shares to vest immediately.

Herb Greenberg, a self-proclaimed longtime critic of Take-Two, paraphrased the filings with some of his own commentary thrown in:

The shares won’t vest immediately if, prior to the company’s annual meeting, which is expected to be before April 1, the Company received a bona fide indication of interest in, or offer to enter into, a business combination (which it did); the offer specifies, with some degree of particularity, the material terms (which it may have) and (my favorite) the offer’s existence hasn’t been publicly disclosed or confirmed by either company before Take-Two’s annual meeting. (Oops, definitely happened.)

In other words, Take-Two was hoping to keep EA’s offer to purchase the company a secret until after its annual meeting. If the shareholders were to become aware of this new compensation package AND the offer from EA, they almost certainly wouldn’t be pleased.

Greenberg wrote on his Marketwatch blog: “Exercising my right as a columnist, who writes commentary, and who (by way of full disclosure) has been critical of Take-Two for at least five years: That’s beyond absurd. Makes you wonder which shareholders the company puts first.”

And I’d have to agree with him. If this is indeed true, I’d have to say this is rather unsavory – and quite possibly much worse than that.

via GamePolitics

Chairman Stauss Zelnick and Take-Two may have rejected EA’s offer to buyout the company behind Grand Theft Auto, but that didn’t stop it from impacting stocks. EA had offered $26 per share, but Zelnick responded, “Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company.”

After today, $26 per share certainly is an insufficient value – Take-Two’s stock price jumped past $26 today. That’s roughly a 50% increase in value that surpasses the amount EA offered.

“We expect Take-Two shares to trade based on the offer price for the foreseeable future,” my mortal enemy and Wedbush Morgan Securities analyst, Michael Pachter, explained earlier today.

“We were shocked and awed by the offer, and our (recommendation to sell Take-Two stock) was wrong,” wrote Pachter. “We believe EA fully intends to complete this acquisition, and believe that Take-Two’s investors will decide that a sale is the best option for them.”

I agree with Pachter that it seems likely that EA has no intention of halting its attempt to acquire Take-Two simply because of this sudden increase in share value.

But the question remains: what impact would this have on the games industry?

via Game|Life