Variety Compares EA/T2 Takeover Bid to Hillary Clinton Campaign... We Disagree

May 20, 2008 -

Much virtual ink has been spilled over Electronic Art's protracted campaign to acquire GTA IV publisher Take-Two Interactive. In the latest news - as GamePolitics reported yesterday - EA has extended its deadline until June 16th.

Variety's Ben Fritz, who pens The Cut Scene blog, yesterday compared EA's takeover bid to the seemingly doomed presidential campaign of Sen. Hillary Clinton:

EA staying in this race is a bit like Hillary Clinton staying in it -- only a complete implosion by the opposition could result in a victory.

Although GP is on record as opposing the EA-T2 merger on the grounds that game consumers will inevitably be screwed in the deal, we couldn't disagree more with Fritz's conclusion that EA's campaign is fruitless.

The deal will almost certainly get done, just not at EA's current $25.74 offering price. We note comments made to GamePolitics by Wedbush-Morgan analyst Michael Pachter earlier this month when EA secured a one billion line of credit:

[EA] need[s] to raise around $800 million to complete the [Take-Two] deal [at $25.74]. The extra $200 million is just a cushion, although I suppose it could be construed as how much higher they’re willing to go [for Take-Two]...
 

So, EA needs about 30-33 million shares to acquire a majority stake in T2 and has an extra $200 million to spend on any price increase. That's a potential $5-6 bump, depending upon the exact number of shares. When all is said and done, look for EA to own T2 for $27-28.


Comments

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

I've said it before and I'll say it again:  Pachter != credible.  Just because he says the deal will be done is by no means an indication it will be.  Take-Two's shareholders have spoken and they don't want to sell to EA right now.  They're right too because GTA4 has deatroyed even Take-Two's own revenue expectations.  Pachter is wrong as often as he's right and why the gaming press continues to accept his predictions as certainty still baffles me.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

I'd say he's wrong more often than he's right. Out of at least dozen stories that had comments from him, he seemed to have been wrong at least three out of four times.

Buy Stock in Take-Two

By the gods, we should be buying those shares! Think about the things Rockstar and T2 have been able to give us over the last few years (scandals notwithstanding); even if these guys don't love gamers specifically, they manage to consistently give us games that make us think they do. Isn't a company like that worth protecting, particularly from the Evil Empire? If we could seriously find a way to collectively purchase the 30-33 M shares that EA would need, WE could proactively block this move and cast our lot with the creative types.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

<blockquote>So, EA needs about 30-33 million shares to acquire a majority stake in T2 and has an extra $200 million to spend on any price increase. That's a potential $5-6 bump, depending upon the exact number of shares. When all is said and done, look for EA to own T2 for $27-28.</blockquote>

Except that EA seems unwilling to part with that much money. If they aren't going to sweeten the deal now, it seems unlikely that they're going to start putting up more later.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

I know that T2 will be considering their stockholders before their fans on this, but wouldn't it be amazing PR for the company if they said they were taking their fan's opnion into consideration and deciding not to sell to EA?  I know I'd sing the praises of T2 if they did.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

T2 doesn't simply have to let this happen though.  They could begin buying up their stock, or some third party that's anti-merger could.  Basically the situation isn't quite as bleak as is being portrayed.

---------------------------------

So speak I, some random guy.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

if EA does end up taking over T2, somehow i can see, as anonymous said, the employees will end up with the shaft.  i would guess that about half (if not more) of T2's payroll would end up getting cut.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

If I were an investor I wouldn't be selling t oany company that needed or was willing to get a loan to take over a sports market.

Watching, instead of taking money away form game sales to pay it bakc, guess who's gonan pay. yep, their employees.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

And look for the Federal Trade Commission to reject the takeover as an illegal monopoly of the sports video game market.

Re: Variety Compares EA/T2 Takeover Bid to Hillary Clinton

This is very disturbing news. Is there anyway GP can poke the various regulatory comittees and see what they've been thinking. This is obviously bad for the industry, and I am overly curious as to what they are thinking about the entire deal.

---- There is a limit for both politicians against video games, and video games against politicians.

 
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Goth_Skunk"The New Totalitarians Are Here" from The Federalist. http://ow.ly/Pjz3b07/07/2015 - 11:31pm
MattsworknameThere was a time in america when we needed unions and they served a good purpose, but that time hasnt been tbe case for about 20 years or more. The same could be said of our current system for teachers in higher educatoin,but thats a whole nother story07/07/2015 - 10:22pm
TechnogeekIn large part, though, that's an extension of the level of unjust deference given to police in general. Kind of hard to find any real grievances to defend against when the organizational culture views "complains about coworker" as worse than "murderer".07/07/2015 - 8:45pm
TechnogeekThat's a police union.07/07/2015 - 8:43pm
TechnogeekNo, police unions are worse by far. Imagine every negative stereotype about unions, then add "we can get away with anything".07/07/2015 - 8:43pm
Goth_SkunkeZeek: No, I do not agree they are union members.07/07/2015 - 7:48pm
E. Zachary KnightTeachers unions are just as bad as police unions, except of course you are far less likely to be killed by a teacher on duty than you are a cop. But they also protect bad teachers from being fired.07/07/2015 - 6:29pm
E. Zachary KnightGoth, so you agree they are still union members. Thankfully we have a first ammendment that protects people from being forced to join groups they don't support (in most cases any way.)07/07/2015 - 6:27pm
E. Zachary KnightAh, police unions. The reason why cops can't get fired when they beat a defenseless mentally ill homeless person to death. Or when they throw a grenade into a baby's crib. Or when theykill people they were called in to help not hurt themselves.07/07/2015 - 6:26pm
Goth_SkunkeZeek: Non-union employees have no right to attend meetings or union convention/AGM, or influence policy. The only time they get to vote is whether or not to strike.07/07/2015 - 6:24pm
Infophile(cont'd) about non-union police officers being given hell until they joined the union.07/07/2015 - 4:58pm
InfophileParadoxically, the drive in the US to get rid of unions seems to have left only the most corrupt surviving. They seem to be the only ones that can find ways to browbeat employees into joining when paying dues isn't mandatory. I've heard some stories ...07/07/2015 - 4:57pm
Matthew WilsonI am old school on this. I believe its a conflict of interest to have public sector unions. that being said, I do not have a positive look on unions in general.07/07/2015 - 3:59pm
TechnogeekWhat's best for the employee tends to be good for the employer; other way around, not so much. So long as that's the case, there's going to be a far stronger incentive for management to behave in such a way that invites retalitation than for the union to.07/07/2015 - 3:10pm
TechnogeekTeachers' unions? State legislatures. UAW? Just look at GM's middle management.07/07/2015 - 3:05pm
TechnogeekIn many ways it seems that the worse a union tends to behave, the worse that the company's management has behaved in the past.07/07/2015 - 3:02pm
james_fudgeCharity starts at home ;)07/07/2015 - 2:49pm
james_fudgeSo mandatory charity? That sounds shitty to me07/07/2015 - 2:49pm
E. Zachary KnightGoth, if Union dues are automatically withdrawn, then there is no such thing as a non-union employee.07/07/2015 - 2:38pm
Goth_Skunka mutually agreed upon charity instead.07/07/2015 - 2:33pm
 

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