EA Agrees to FTC Delay in Take-Two Acquisition

| 5 Jun 2008 12:54

Electronic Arts has agreed to suspend its efforts to buy Take-Two Interactive pending an investigation by Federal Trade Commission regulators.

A report by Reuters says EA has agreed to delay its takeover attempts by 45 days, or until the FTC ends its probe into the deal. While the FTC hasn't released specific information about the nature of its investigation, concerns are widely assumed to be focused on anti-competitive aspects of the deal, particularly in relation to the powerful EA Sports brand. Currently, EA's only major competitor in the sports videogame genre is Take-Two's 2K Sports series, and many observers have suggested that if the takeover is successful, EA will axe the 2K Sports brand, leaving EA Sports with a virtual monopoly.

The delay follows the most recent extension of EA's tender offer to Take-Two shareholders, which came on May 16 despite earlier words from EA executive Jeff Brown, who said in an interview that Take-Two was "not a strategic priority" for the company and implied that EA's interest was beginning to wane. That extension set the tender offer deadline back another month, to June 16, although it remains unlikely that EA will be able to acquire sufficient shares through the tender offer to achieve its goal.

Shares in both Take-Two and EA rose slightly this morning, with Take-Two reaching $27.37 while EA achieved $49.25. EA's current offer for outstanding shares in Take-Two remains fixed at $25.74, making the deal worth roughly $2 billion. To learn more, check out the EA and Take-Two acquisition information sites.

Disclosure(s): Strauss Zelnick, Chief Executive Officer and Chairman of the Board of Directors of Take-Two Interactive Software, Inc., is the head of ZelnickMedia, an investor in both Take-Two and Defy Media, LLC, our parent company. This article was published without approval or consent of ZelnickMedia or Take-Two.
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