EA’s fixation on buying out Take-Two Interactive is becoming big news outside of the game industry and has the attention of surprised Wall Street analysts.
Last month Take-Two rejected an offer from EA for a $2 billion buyout and said the price was "inadequate." Wall Street watchers believe that the refusal was based upon the upcoming release of Grand Theft Auto 4 and how this blockbuster hit would obviously push up the value of Take-Two past the initial bid price offered by Electronic Arts.
The move by Electronic Arts to commandeer Take-Two through a hostile takeover has not only shaken up the shareholders of the company but has generated a small frenzy of opportunistic buyers that have snapped up Take-Two shares in the hopes of catching in on the impending buyout.
During these events, Wall Street analysts have commented that the hostile takeover bid by EA is unprecedented in the gaming industry. DFC Intelligence president David Cole said, "This is the most aggressive approach for a publisher ever – there simply haven’t been hostile takeovers in the games space."
Michael Pachter, analyst for Wedbush Morgan concurred and stated, "I don’t recall ever seeing a hostile takeover in games. I think Take Two’s board will try to squeeze more money out of EA by making this a friendly deal."
While Electronic Arts has a long history of purchasing game companies, it has never shown the strong-arm tactics recently revealed in its attempt to buy T2. As more game companies are either bought out or merged, one has to wonder if this is really good for the game industry and for that matter, gamers.
[via mcvuk.com]
