WaPo: Activision Blizzard Now Official

July 9, 2008 -

Mike Musgrove of the Washington Post reports that the Activision-Vivendi merger is now official, following a vote by 92% of Activision shareholders to approve the deal.

The new company will be known as Activision Blizzard. We hope to see a new logo unveiled, as opposed to mock-ups, like the one at left, which can found around the web.

Referring to EA's now-former status as the biggest kid on the game industry block, Wedbush-Morgan analyst Michael Pachter told Musgrove:

It's good to have a duopoly instead of a monopoly. This just makes the industry that much more interesting.

 

29 comments

Judge Works WoW References into Activision Merger Court Order

July 3, 2008 -

An attempt to block Activision's merger with Vivendi has ended with a ruling issued by William B. Chandler III (left), chief judge of the Delaware Court of Chancery.

As reported by the Wall Street Journal Law Blog, the judge has apparently taken notice of what World of Warcraft - one of the leading assets in the merger - is all about.

In denying a municipal pension plan's request for a preliminary injunction which would have put the Activision-Vivendi marriage on hold, Judge Chandler wrote:

In some ways, perhaps, the world of Mergers and Acquisitions is a massively multiplayer role playing game as well. Like in World of Warcraft... the participants in the M&A field take on certain roles, interact in their own community, hone specialized skills, and even develop a unique, somewhat curious vernacular.

 

One particular quest in the world of M&A is disclosure litigation. In the instance of disclosure litigation presently pending before this Court, the world of M&A meets the World of Warcraft.

 

In the role-playing game that is this disclosure litigation, both sides have played their respective roles well. Like any game, this one has rules, and the most essential rule of disclosure is materiality. Because the plaintiff could not establish the materiality of its final three disclosure claims, the motion for a preliminary injunction is denied. . . .GAME OVER.

GP: Very cool, indeed, your honor. Read the full decision here (31-page pdf).

Did Anyone Notice that Take-Two...

July 1, 2008 -

Did anyone notice that Take-Two (NASDAQ: TTWO) closed today at $25.14, or sixty cents under EA's current (and apparently endlessly renewable) $25.74 tender offer?

By our count it's at least the second time that TTWO has closed below the tender price in the past week, admittedly a rocky one for Wall Street. It seems kind of strange, since EA will buy all the TTWO you care to sell them at 25.74. Why would anyone sell below that price?

For interpretation, GamePolitics turns to Wedbush-Morgan super-analyst Michael Pachter:

GP: Mike, what do you make of TTWO closing well below the EA tender price of 25.74? That would seem to be a natural floor…

Pachter: The daily [share] price is the probability-weighted price of a [T2-EA] deal happening. [The expectation of] no deal is [priced] around $17-20, a deal at $28 has a relatively high probability. Before, the arbs placed a higher chance of a deal, and a higher [share] price.

GP: So are you saying that today's close $.60 under the [EA] tender price reflects a sense that the deal is now less likely?

Pachter: A combination of less likely or a lower expected deal price.  Probably more of the latter, as a tribute to EA's discipline.  Still very likely that a deal happens at $27-28.

Motley Fool Chides EA as "Runaway Groom"

June 21, 2008 -

Financial website The Motley Fool mocks Electronic Arts today.

Rick Aristotle Munarriz delivers the slap in a column recounting EA's seemingly endless campaign to acquire Grand Theft Auto publicher Take-Two Interactive:

What if you threw a wedding and nobody came? That's becoming the embarrassing reality... EA's latest tender offer to buy the Grand Theft Auto IV software hotshot expired on Monday, so what did EA do? It repeated the offer. Again.

 

For those scoring at home, this is the third time that EA has seen its tender offer... expire sorely undersubscribed. It gets worse with every passing month. EA had 6.4 million shares -- or less than 8% of the outstanding shares -- submitted during the first tender. EA now has just 6.1 million shares on board.

 

EA needs to step up and either raise its bid, dare Take-Two to seek out a better deal elsewhere, or just walk away. Anything else is just delusional.

 

26 comments

Take-Two Plays Hardball with the FTC

June 17, 2008 -

Things are beginning to get ugly between Take-Two Interactive and the Federal Trade Commission.

Attorneys for Take-Two have strongly disputed the FTC's contention that the Grand Theft Auto publisher is stonewalling the government agency's investigation into antitrust aspects of the potential EA merger (see: FTC Hauls Take-Two Into Court Over EA Takeover Bid).

In a document filed yesterday with the U.S. District Court in Washington, D.C., Take-Two fires back at the FTC:

No one at Take-Two Interactive Software, Inc. (“Take-Two”) is seeking to thwart the proper investigation by the Federal Trade Commission (“FTC”) staff of Electronic Arts, Inc.’s (“EA”) tender offer. On the contrary, from the outset, Take-Two has fully cooperated with these efforts, already having produced more than 479,000 pages of responsive documents through the date of this Opposition.

 

The issue before the Court is how the seemingly boundless desire of a government agency for information can be contained in order to save a company from the ruinous costs of compliance with a subpoena that requires it to search virtually every electronic and paper document in its possession, and to make available most of its senior executives for investigational hearings (pre-complaint depositions) in a situation where the company is not even a willing party to any transaction being investigated and where it is quite possible that no such transaction will ever occur.

 

 In the lengthy filing, Take-Two claims that it has been bending over backwards to meet the FTC's demands, including keeping a team of attorneys working over the recent Memorial Day weekend in an effort to supply requested internal documents. Referring to the FTC's conduct as an "abuse" at one point, T2 goes on to assert:

The FTC fails to engage in any meaningful analysis, in either its negotiations or motion papers, of its specific requests. It refuses to acknowledge that compliance with all of its requests would require a comprehensive, company-wide review of Take-Two’s data and documents, which encompass a huge universe of information...

A seperate declaration from a Take-Two attorney claims that it costing the company $50,000 per day in legal bills to meet the FTC's requirements.

Take-Two also submitted a slew of exhibits to the Court. Although no trade secrets are revealed in the publicly-viewable documents, it's clear from their context that the FTC is probing the workings of the "pipeline" by which T2 gets its sports games to market. The company also provided data on its exclusive licensing arrangement with Major League Baseball (MLB 2K8 screen at left) as well as NPD sales data for its sports games from 2001-2007.

23 comments

EA Extends Take-Two Acquisition Deadline

June 17, 2008 -

As expected, Electronic Arts has extended its tender offer for outstanding shares of Take-Two Interactive.

EA issued a press release this morning announcing that yesterday's deadline has been extended to July 18th. EA exec Owen Mahoney is quoted in the press release:

Our offer price remains unchanged at $25.74 per share, which is a substantial premium to where Take-Two's stock was trading prior to our offer. We congratulate Rockstar on the successful launch of GTA IV but believe our offer reflects a full and fair price based on the long-term value of Take-Two's entire operation.

EA also noted that extending the deadline will permit the Federal Trade Commission's review of the proposed merger to continue. Based on the number of shares reported tendered, EA has made no progress since the last extension.

UPDATE: Not unexpectedly, Take-Two has issued a press release urging sharholders to reject EA's offer.

30 comments

Today is Deadline Day for EA's Latest Take-Two Offer

June 16, 2008 -

GamePolitics readers may recall that Electronic Arts' latest tender offer for outstanding Take-Two shares expires today.

Will EA extend its deadline? Raise its offer price? Drop out?

An extension seems likely, given that the Federal Trade Commission has not completed an evaluation of whether an EA takeover of T2 would have antitrust implications. As we've reported, Take-Two is dragging its heels on that process, and an annoyed FTC is dragging T2 into court over the matter next week. And, of course, EA has placed the acquisition on hold, pending the FTC's findings.

Over at Level Up, Newsweek's N'Gai Croal has insightful analysis from former FTC attorney Justin Blankenship on the government agency's current dust-up with Take-Two.

Meanwhile, Forbes speculates that EA wants to close the deal ASAP in order to lock down Rockstar's Sam and Dan Houser before their contract with T2 expires next February:

Once that contract expires in 2009, the Housers will hit the open market. Despite the high price their services will command (mostly in the form of extensive royalties), game publishers may well enter into a heated bidding war for the Houser brothers in the hopes of seizing the next Grand Theft Auto phenomenon.

If Electronic Arts wants the minds behind Grand Theft Auto, it's going to have to move quickly. To gain the upper hand, Electronic Arts may be forced to pull the trigger and raise its $25.74 per share bid to around $30 per share--a move most analysts believe essential if Electronic Arts is serious about the Take-Two acquisition. Control of Take-Two would grant EA the rights to the Grand Theft Auto series, which the Redwood City-based publisher could then use to sweeten negotiations with the Housers. Otherwise, there's nothing stopping the brothers from setting up a rival series at a new studio.

 

 

Gamer Class-action Suit Filed Against EA Over Madden Monopoly

June 11, 2008 -

A pair of gamers have filed a class-action lawsuit against Electronic Arts over its exclusive licensing deal with the NFL.

Madden owners Geoffrey Pecover of Washington, D.C. and Jeffrey Lawrence of California are the named plaintiffs in the class-action, which was filed in U.S. District Court in Northern California.

The suit, which essentially follows a line of reasoning laid out by GP, describes how EA, faced with competition from Take-Two's excellent NFL 2K5, reduced the price of Madden from $49.99 to $29.99 in order to stay competitive with NFL 2K5, which was aggressively priced at $19.99. From the lawsuit:

By signing the exclusive agreement with the NFL, Electronic Arts immediately killed off Take Two's NFL 2K5 software, the only competing interactive football product of comparable quality to its Madden franchise...

 

Once again without a competitor Electronic Arts raised its prices dramatically... nearly seventy percent to $49.95

The suit also notes EA's ongoing campaign to acquire Take-Two:

A successful takeover of Take-Two Interactive by Electronic Arts would remove one of the few companies with the ability  and expertise to compete in the market for interactive football software in the event that the Electronic Arts exclusive agreements were terminated or voided by a court.

Two law firms appear to be involved on the plaintiffs' side at this point: Hagens Berman Sobol Shapiro and The Paynter Law Firm. Both are experienced in class action suits.

Read the complaint here...

Via: Gamespot

64 comments

Pachter Analyzes Why T2 is Stonewalling the Feds on EA Deal

June 11, 2008 -

In our previous GamePolitics story we described how the Federal Trade Commission went to U.S. District Court in an attempt to force Grand Theft Auto IV publisher Take-Two Interactive to cooperate in an anti-trust investigation related to Electronic Arts' potential takeover of T2.

So, why would Take-Two thumb its nose in the government's face, even to the point of reneging on previously agreed-upon conditions?

We asked financial analyst Michael Pachter (left), who covers the video game sector for Wedbush-Morgan:

I think that the reasons range from A) being incredibly savvy and holding off the FTC as a tactic to slow the process to Z) being incredibly arrogant.

 

It's hard to know where Take-Two fits on the scale from A to Z.  Their general counsel is pretty experienced, and it surprised me that he would allow the company to deal with a subpoena this way.  The FTC's action of seeking a court order is pretty severe, and shows how seriously the FTC takes this slight.

 

I'm not sure what Take-Two hopes to gain from this, other than the obvious delay to the process.  However, the process won't be delayed if Take-Two's failure to comply with the subpoena results in the FTC granting approval without looking at these documents. There is NOT a presumption of anti-competitiveness, and if EA demonstrates that the combination would not be anti-competitive, Take-Two would be better served to provide evidence to the contrary if it wishes to remain independent.

 

It seems to me that they would be best served by cooperating fully with the FTC, and by pointing to records that show how competitive their business is with EA's business.  Apparently, they have reached a different conclusion.

 

 

UPDATE: So, what's to be gained by delaying? We put that question to Pachter as well:

I think it's always in their best interest to buy more time.  Management has an incremental 720,000 shares of restricted stock that vest if the takeover happens after March 31, 2009.  More time buys them a greater ability to prove the impact that they've had on the company, and they appear sincere in their belief that they have turned Take-Two around.  More time allows Activision to close its Vivendi deal and give Take-Two a look.  Ubisoft might be interested...

 

FTC Hauls Take-Two Into Court Over EA Takeover Bid (UPDATED with GP Exclusive Content)

June 11, 2008 -

Reuters is reporting that the Federal Trade Commission has initiated proceedings in U.S. District Court to compel Take-Two Interactive to respond to the FTC's subpoenas in relation to Electronic Arts' ongoing hostile takeover bid.

As GamePolitics reported last week, Electronic Arts placed its takeover on hold pending the FTC's review to determine whether an EA-T2 merger would violate federal antitrust laws.

GP is currently reviewing court documents. An affidavit by FTC attortney Reid Horwitz alleges that Take-Two reneged on agreements to provide documents requested by the FTC.

Horwitz also writes that the federal agency is particularly interested in the files of Take-Two CEO Ben Feder and Visual Concepts president Greg Thomas, along with several sales and marketing execs, one of whom was formerly the marketing VP for 2K Sports.

Given the government interest in 2K Sports and Thomas, whose studio creates most of T2's sports titles, it's clear that the FTC investigation is centered around a possible monopoly in sports games should the EA takeover occur.

While it may appear odd that T2 would balk at the FTC request, according to FTC attorney Horwitz, T2's position seems to be that it should not be burdened with providing the documents since it was EA that inititated the uninvited takeover attempt. T2 claimed to the FTC that it spent in excess of one million dollars in providing a limited amount of info to the agency.

Horwitz relates that, while T2 agreed to give up some of the requested employee files, it refused to provide files from CEO Ben Feder or Visual Concepts' Greg Thomas. When the FTC asked why, a Take-Two attorney replied:

These individuals were "creative types" who would leave the company rather than allow their files to be searched...

UPDATE: U.S. District Court Judge Henry Kennedy has apparently been persuaded by the government's position, and has ordered Take-Two into court on June 24th to show cause why he shouldn't rule in favor of the FTC.

UPDATE 2: A document filed by Take-Two with the Securities and Exchange Commission provides its comment on the FTC issue:

Prior to the issuance of the FTC’s subpoena and CID the Company has been cooperating fully with the FTC with regard to their review of EA’s Offer to acquire the Company. The Company has already provided enormous quantities of data and access to key executives, and has offered to provide the FTC staff with additional documents and information. Nevertheless, the Company believes the FTC’s subpoena
and CID are unnecessarily broad and would entail unacceptable additional expense to the Company. To limit the inordinate expense and labor that the FTC’s demand would entail, the Company has sought to obtain reasonable limits on the scope of the information sought. The Company will continue to cooperate actively and produce documents in response to the FTC’s previous requests, and will of course attempt to seek an acceptable resolution to this matter as quickly as possible.

 

19 comments

T2 Claims Other Offers But Analyst Says Management Failing to Deliver

June 7, 2008 -

As reported by Silicon Valley Insider, Take-Two Interactive execs claimed in a conference call this week that they have potential suitors other than EA. Forbes speculates that, if such suitors really exist, they might be Activision or Ubisoft.

GP: Personally, I wonder if it might make some sense for Sony to go after Take-Two. That would make the GTA series a permanent PS3 exclusive, supercharge system sales, and they could sell off the rest.

Meanwhile, GameSpot reports that Evan Wilson, financial analyst with Pacific Crest Securities, told investors that once you get past Rockstar, there's not much to like about T2:

Rockstar has supported this organization for too long and it is right to spend every dollar that it can get from Take-Two for keeping the business alive. Unfortunately, management appears to be doing the same thing without it being nearly as deserved.

 

At the same time as its cost structure is deteriorating, management is telling investors that it is the most efficient organization in the business. That simply is not true. Management talks about having a lean sales, marketing, and corporate infrastructure behind its development talent. We disagree with this as well.

Wilson also dinged Take-Two for missing release schedules and recommended that investors take EA's buyout offer before it disappears:

If it appears that virtually every major game has been delayed, you would be correct.

 

It is starting to appear that the company is back to where it started. After the success of Grand Theft Auto [IV], it will be looking at a bloated cost infrastructure relative to its revenue opportunity, which will likely be further muted by game delays and underperformance.

 

We believe that the risk of EA dropping its bid for [Take-Two] is greater than the reward of EA coming back with a modestly higher bid, and we continue to recommend that investors take profits. EA's $25.74 offer is more than fair, in our view.

 

19 comments

EA's Take-Two Takeover Bid on Hold Pending Government Review

June 5, 2008 -

According to Reuters, Electronic Arts has reached an agreement with the Federal Trade Commission to delay its attempt to acquire Take-Two Interactive while FTC investigators address regulatory [i.e. - monopoly] issues.

What might the FTC be looking into? Newsweek's N'Gai Croal covered this in great detail recently, including mention of my fears that consumers will suffer if EA is successful.

Cnet's Daniel Terdiman wrote yesterday "that [EA is] losing its credibility with each new extension." Frankly, however, I can't see Terdiman's point. Credibility is a non-issue here. The dollars - and government regulatory clearance - will ultimately dictate whether this deal gets done.

Meanwhile, on his Anti-Tust Commentary blog, attorney Matthew Wild offers some legal insight into the EA's strategy:

Under the agreement, EA must give the FTC 45 days’ notice of its intention to close.  Parties often grant the Antitrust Division and FTC more time to review their transactions with the hope of convincing the agencies not to challenge the merger or to allow them to negotiate a remedy.

The most important take-away here is that EA is obviously worried that the FTC may have some concerns about the deal. As a game consumer, it's reassuring to know that regulators are taking a good look at the proposed merger.

As I've pointed out before, EA's track record with the Madden franchise demonstrates that the game publisher is willing to lower prices when faced with serious competition. The Madden case also shows that EA will take agressive steps to eliminate its competition and, if successful, will raise prices in a non-competitive landscape.

12 comments

Report: Disgraced Former T2 CEO Sells Recent Startup Game Company

June 4, 2008 -

Fortune.com reports that Ryan Brant (left), who pleaded guilty to committing massive fraud during his tenure as CEO of Grand Theft Auto publisher Take-Two Interactive, has sold his newly-started game development company.

In late April Newsweek's N'Gai Croal broke the news that Brant was back in the gaming biz as part of GreenScreen Interactive, although not as a corporate officer. Brant is barred from holding office in a public company as part of his 2007 guilty plea on fraud charges.

Of the GreenScreen sale, Fortune reports:

Brant agreed to sell the videogame company he recently founded, GreenScreen Interactive Software, to a company called Mandalay Media, whose co-chairmen are Peter Guber - the Hollywood producer behind "Midnight Express" and "The Color Purple" - and CEO Bruce Stein, a former Mattel and Sony executive...

 

According to a regulatory filing, GreenScreen and Mandalay entered into merger talks after Mandalay pledged a $2 million bridge loan, collateralized by GreenScreen's corporate assets...

 

Not much is publicly known about GreenScreen - or Brant's role in the company... Nowhere does the company's Web site mention Brant... Brant may well have turned a corner in the way he does business, choosing a quiet life of video game development over fraud and self-dealing.

New York Post reporter Roddy Boyd, who has often written about Take-Two for the newspaper, penned the Fortune.com piece.

1 comment

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.

10 comments

Take-Two Disses EA's Latest Deadline Extension

May 19, 2008 -

Take-Two Interactive is urging stockholders to reject today's extension by EA of its deadline to tender T2 shares at the $25.74 offering price.

Of the extension, Take Two chairman Strauss Zelnick said:

This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our Board of Directors thoroughly reviewed and unanimously determined to be inadequate and contrary to the best interests of Take-Two’s stockholders. As such, the recommendation of our Board of Directors that stockholders not tender their shares to EA remains unchanged...

Take Two CEO Ben Feder added:

EA’s highly conditional offer fails to compensate our stockholders for our exceptional portfolio of intellectual property... In the last several weeks, our strategy and Take-Two’s value have been vividly demonstrated by... The record-breaking sales performance of Grand Theft Auto IV... We have also just announced an agreement with Universal Pictures to make BioShock, the universally acclaimed hit video game, into a feature film... EA’s proposal undervalues our Company.

GP: The operative phrase around T2 HQ seems to be "highly conditional..."

9 comments

BREAKING: EA Extends Take-Two Takeover Deadline

May 19, 2008 -

In a move that will surprise almost no one, Electronic Arts (ERTS) has just issued a press release announcing a 30-day extension of its May 16th deadline to purchase outstanding shares of acquisition target Take-Two Interactive (TTWO). The new deadline will expire at 11:59 p.m. on June 16th.

The most noteworthy point in EA's press release is that the offer price has not changed. There had been speculation that EA would sweeten the numbers, but that hasn't happened - at least, not yet. The announcement quotes Senior VP Owen Mahoney:

Extending our offer will allow the FTC review process to continue. EA's offer price remains unchanged at $25.74 per share and our offer is still subject to conditions that include regulatory approval. As stated earlier, we retain the right to terminate the offer if the conditions are not satisfied.

EA reports that, as of last Friday, it had acquired 6.2 million shares of T2. With about 77m shares of T2 outstanding, EA would need to acquire roughly another 33m shares to acquire a majority position.

43 comments

Deadline Day for EA-Take Two Takeover

May 16, 2008 -

Today is the deadline for shareholders of Grand Theft Auto IV publisher Take Two Interactive to accept Electronic Art's tender offer of $25.74.

So, will the deal get done?

Probably not - at least not today. Forbes speculates that EA will extend its deadline. Adding a little sweetener to the offer wouldn't hurt, either.

Oft-quoted Wedbush-Morgan analyst told Forbes that EA screwed up by making its initial offer too high:

Wedbush Morgan analyst Michael Pachter believes Electronic Arts started by offering too much for the company. EA could have started its bidding at $22 a share, or $1.7 billion...

 

By publicly starting at $26, then a rich 52% premium, EA must have figured Take-Two would jump at the offer. Zelnick Media was, after all, brought on in 2007 to turn around the faltering Take-Two. Instead, Zelnick stonewalled. "EA didn't know how to react," says Pachter.

Meanwhile, analyst Colin Sebastian told the San Francisco Chronicle:

I think it's more than likely the deal gets hammered out. Maybe it happens at a slightly higher price, but it's good for shareholders.

 

20 comments

N'Gai Croal: EA-T2 Merger Could Face Anti-trust Problems

March 31, 2008 -

Should Electronic Arts be successful in its bid to acquire a controlling interest in Grand Theft Auto publisher Take Two Interactive, the merging of the companies could face harsh government scrutiny, reports Newsweek's N'Gai Croal.

Croal serves up a guest post from one of his readers, Justin Blankenship, who formerly worked for the Federal Trade Commission. While with the FTC, Blankenship's assignment was to review potential technology and entertainment mergers for anti-trust violations. Of the EA-T2 situation, Blankenship writes:
 

Although EA's offer may eventually prove too lucrative for Take-Two to pass up, I wouldn't assume that this deal will get a rubber stamp from government antitrust regulators. I'm specifically referring to comments by Wedbush's Michael Pachter, who stated:
"Currently [EA and Take-Two] compete in pro basketball, college basketball and hockey. So by taking out all of that, EA has a monopoly in sports. If these guys have a monopoly, they're not going to cut pricing on sports games as quickly. We've been seeing sports games come down [in price] before Christmas the last couple of years. That'll never happen again."


GP: Blankenship is referring to comments Pachter made to GamePolitics in a report from February 25th. See: Pachter: Sports Drives T2 Deal for EA; GTA is "Gravy". Blankenship explains:

Take Two Fires Back at EA

February 24, 2008 -

It looks as if this fight could get ugly... 

GamePolitics has just received a press release from Take Two Interactive in response to Electronic Arts' hostile takeover bid.

In the release, the Take Two board confirms EA's offer and pronounces it "inadequate in multiple respects and not in the best interests of Take-Two’s stockholders." From the release:
 

After careful evaluation, the Board has determined that EA's proposal substantially undervalues Take-Two’s robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty. 

We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry.


Take Two Executive Chairman Strauss Zelnick is quoted:
 

Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time... Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry...

Given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released. 

Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release).  We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA’s refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders.


Take Two also sent GamePolitics the text of a series of letters between Zelnick and EA CEO John Riccitiello:

 
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Andrew EisenAs it happens, Chinatown Wars is the only GTA game I've played.04/19/2014 - 10:43am
Papa MidnightWith GTA5 (to date) failing to even provide indication of a PC release, I'm realising that this might be the first GTA game that I have not played (outside of Chinatown Wars) since the series inception.04/19/2014 - 8:14am
IanCSo im guessing a bunch of edutainment games, which a lot of people elsewhere are going gaga over, dot count as classics? Okay. If you don't mind me, i have a sudden urge to play Putt Putt....04/19/2014 - 6:15am
MaskedPixelantehttp://www.joystiq.com/2014/04/18/playstation-99-cent-sale-discounts-tokyo-jungle-super-stardust/ Weekend long PSN flash sale. So much stuff is 99 cents for the rest of the weekend.04/18/2014 - 5:59pm
Adam802http://www.polygon.com/2014/4/18/5627928/newtown-video-game-addiction-forum04/18/2014 - 4:14pm
Matthew Wilsonit is a video talking about why certain games/products/consoles do well, and others do not. he back it up with solid research.04/18/2014 - 3:56pm
Andrew EisenI'm not keen on blind links. What is it?04/18/2014 - 3:45pm
Matthew Wilsonthis is worth a whatch https://www.youtube.com/watch?v=MyXcr6sDRtw&list=PL35FE5C4B157509C904/18/2014 - 3:43pm
MaskedPixelanteNumber 3: Night Dive was brought to the attention of the public by a massive game recovery, and yet most of their released catalogue consists of games that other people did the hard work of getting re-released.04/17/2014 - 8:46pm
MaskedPixelanteNumber 2: If Humongous Entertainment wanted their stuff on Steam, why didn't they talk to their parent company, which does have a number of games published on Steam?04/17/2014 - 8:45pm
MaskedPixelanteNumber 1: When Night Dive spent the better part of a year teasing the return of true classics, having their big content dump be edutainment is kind of a kick in the stomach.04/17/2014 - 8:44pm
Matthew Wilsonhttp://www.giantbomb.com/articles/jeff-gerstmann-heads-to-new-york-takes-questions/1100-4900/ He talks about the future games press and the games industry. It is worth your time even though it is a bit long, and stay for the QA. There are some good QA04/17/2014 - 5:28pm
IanCErm so they shouldn't sell edutainment at all? Why?04/17/2014 - 4:42pm
MaskedPixelanteNot that linkable, go onto Steam and there's stuff like Pajama Sam on the front-page, courtesy of Night Dive.04/17/2014 - 4:13pm
Andrew EisenOkay, again, please, please, PLEASE get in a habit of linking to whatever you're talking about.04/17/2014 - 4:05pm
MaskedPixelanteAnother round of Night Dive teasing and promising turns out to be stupid edutainment games. Thanks for wasting all our time, guys. See you never.04/17/2014 - 3:44pm
Matthew WilsonAgain the consequences were not only foreseeable, but very likely. anyone who understood supply demand curvs knew that was going to happen. SF has been a econ/trade hub for the last hundred years.04/17/2014 - 2:45pm
Andrew EisenMixedPixelante - Would you like to expand on that?04/17/2014 - 2:43pm
MaskedPixelanteWell, I am officially done with Night Dive Studios. Unless they can bring something worthwhile back, I'm never buying another game from them.04/17/2014 - 2:29pm
PHX Corphttp://www.msnbc.com/ronan-farrow/watch/video-games-continue-to-break-the-mold-229561923638 Ronan Farrow Daily on Video games breaking the mold04/17/2014 - 2:13pm
 

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