Take-Two Silent on EA Request That Poison Pill Be Dropped
Take-Two Interactive remained mum Monday on a Friday request by Electronic Arts to drop a poison pill provision adopted by Take-Two early last week (CED March 27 p6). Take- Two hasn’t commented publicly. EA’s request came in a two- prong amendment to its tender offer to buy all Take-Two shares, each change responding to Take-Two decisions last week to adopt the poison pill and postpone its annual shareholder meeting to April 17 from April 10.
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EA agreed to extend its offer until the end of the day on April 18 from midnight April 11. But EA added the condition to its offer requiring that Take-Two’s board kill the poison pill, which kicks in once an investor owned 20 percent of the company or anyone above that threshold bought two percent more.
EA stuck to its guns Friday on its offer for Take-Two stock despite revelations last week that Take-Two had entered into “informal discussions” with outside companies trying to counter EA’s $26 per share offer, which Take-Two said “undervalues” the maker of Grand Theft Auto videogames. Take-Two has had “expressions of interest” from “numerous parties” and plans to start formal talks with them April 30, the day after Grand Theft Auto IV’s retail release, Zelnick told investors at Wednesday’s Bank of America Small and Mid Cap conference. Take-Two is willing to enter confidentiality agreements for preliminary talks, he said. Take-Two made a similar offer to EA, which rejected it in launching a hostile March 13 tender offer (CED March 14 p5).
“The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction,” said Owen Mahoney, EA senior vice president of corporate development, Monday. “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,” he said.