FTC double Takes on EA buyout

US regulators want more time, info to assess anticompetitive implications of Take-Two takeover.

Later today, Take-Two Interactive will hold its annual shareholders meeting, in which board members may or may not take Electronic Arts up on its $26 dollar-per-share buyout proposal. Regardless, the US Federal Trade Commission may step in to halt the merger before it can commence.

EA said today that it has received its second request for information from the FTC regarding its Take-Two takeover intentions. "While EA believes that its proposed transaction with Take-Two would not be anti-competitive, the FTC has not yet reached any conclusions regarding the proposed acquisition and has indicated that it needs further information and additional time to conduct its review," the publisher said in a succinct statement.

Whereas the proposed Activision-Vivendi merger has by all accounts gone swimmingly since it was announced in December--most recently gaining the blessing of the European Union's antitrust body--EA's proposed buyout of Take-Two has hit substantial turbulence. After EA offered a 64 percent premium in a buyout bid worth $2 billion, Take-Two's board outright rejected the proposal, saying among other reasons that the offer undervalued the company.

Take-Two's unwillingness to entertain acquisition talks until after the April 29 release of Grand Theft Auto IV prompted significant shareholder unrest, resulting in a lawsuit and the publisher's two largest investors significantly reducing their stake in the company. Taking further counter-takeover measures, Take-Two's board established a "poison pill" clause, which would allow for the creation of new shares in the company if any individual shareholder acquires 20 percent or more of the company within six months of its adoption.

Take-Two's continued obstinacy toward the deal prompted EA to take its buyout offer hostile, appealing directly to the publisher's shareholders with its $26 per-share tender offer. EA's offer expires tomorrow at 11:59 p.m., and is conditional on Take-Two executives dropping the poison-pill provision in relation to EA.

49 Comments

  • SS4_Bowman

    Posted Apr 23, 2008 8:14 pm GMT

    I'm going to be extremely realistic and say that Electronic Arts IS beginning to start it's monopolistic stranglehold on the gaming industry if this T2 takeover goes down. But there's as much a chance of that happening as there is a chance of the Knicks getting a decent coach. Once they take over T2, what's next? THQ? I can't begin to imagine WWE gaming through EA. I remember WCW Mayhem...it sucked more ass than Jim McGreevey. But I digress. The FTC must make EA pay for what they're doing. Monopolies are illegal FOR A REASON!!!

  • TranClan

    Posted Apr 20, 2008 10:10 am GMT

    I hope EA is taken down by the FTC since EA is ruining the gaming industry with all their crap games. I admit some are good but that's only like 1 out of 1000 of their games are good

  • Proust

    Posted Apr 19, 2008 5:26 am GMT

    As long as conservatives run the show the FTC will do nothing. You don't bite the hand that feeds you.

  • mrklorox

    Posted Apr 18, 2008 4:06 pm GMT

    How could they need more time? I personally thought the NFL license monopoly would have been enough for government regulations a few years back... this acquisition is many many times larger than that. WTF FTC?

  • devilscry

    Posted Apr 18, 2008 10:34 am GMT

    EA thinks they can get away with paying a high price for Take Two now, meanwhile alot of people knew they wanted to undercut Take Two before GTA 4 came out. thinking they'd get a bargain, but alot of people didn't even realize the sports implications, and thats the biggest problem. Screw you EA and your attempt to corner the market!!

  • hunter8man

    Posted Apr 18, 2008 5:22 am GMT

    It's about time the FTC looked into this. This is a monopolization of the industry plain and simple. What EA is trying to do is not good for competition or the consumer. You also have to look at the sports games in which 2K Sports would probably end up being a thing of the past and all of the licenses would belong to them aside from the NBA.

  • speed45823

    Posted Apr 18, 2008 4:50 am GMT

    hey check out the new and improved profile of john retardello on the following website.

    http://en.wikipedia.org/wiki/Electronic_Arts#EA_under_Probst.2FRiccitiello

  • Spartanx23

    Posted Apr 17, 2008 11:38 pm GMT

    This is an agressive takeover, plain and simple. EA would aquire the GTA series, and be able to snuff out their only competition in the sports world, effectively dismantling 2K sports.

  • BigSmitts07

    Posted Apr 17, 2008 9:44 pm GMT

    if i was take two...id party right through 1159 and see what happens =)

  • Merl57

    Posted Apr 17, 2008 8:30 pm GMT

    Its all about competition and EA has used its marketing strategies to completely own MLB, NFL and acquire other companies who are successful. EA is not really so much a company that makes games (they do) but they are more of a company that buys companies who make games.

  • WizengamotX

    Posted Apr 17, 2008 6:44 pm GMT

    To kos... yes. The bigger the company, the less it has to worry about quality and pleasing the consumer. One might argue the opposite, but I say to them this: Which is better quality... McDonald's or a small neighborhood burger joint? A neighborhood burger joint is definitely better quality, no matter how low the quality. Which is more popular? The answer, as you all know, is McDonald's. So while a larger company has a quality standard that all products must abide by, their standard isn't necessarily high. With so many games to worry about making, why not cut a couple weeks of development to save some cash? Well isn't that convenient to the consumer. The company is so big that any protests will be ignored. Trusts are bad. That is why Standard Oil, the Union Pacific Railway, and Carnegie Steel were all eventually dismantled in some way or other. It's illegal.

  • kos1085

    Posted Apr 17, 2008 4:07 pm GMT

    Would EA taking over take two be a bad thing???

  • darknferno12

    Posted Apr 17, 2008 4:07 pm GMT

    Hopefully the FTC will see the sports side of the acquisition since EA picked a perfect time to bid, down play it with the GTA IV release the biggest game of the year, praising Rockstar saying thats the main reason, paying a premium percent well knowing if it was another company acquiring Take-Two it would be a high price but since EA's benefit is through the roof it's undervalued and once this would have gone through whats this no more sports franchise to compete with well we never knew that all we wanted was Rockstar that is anticompetition

  • SweetMusic

    Posted Apr 17, 2008 3:39 pm GMT

    The shareholder meeting is starting right now! DON'T GIVE IN TO EA SHAREHOLDERS!

  • swyg

    Posted Apr 17, 2008 3:34 pm GMT

    @VolcanoMan001

    Anti-competitive implications in the way the sub-title displays means that when a company takes over more companies, it's destroying the competition trying to keep competition from going against it. In this case, EA doesn't want competition.

  • VirtuaCast

    Posted Apr 17, 2008 3:23 pm GMT

    EA said If I say good thing about them and downplay the fact they want to get rid of 2K sports, they will pay me. How do I get in contact with FTC?!!!!

  • dn3datomiced

    Posted Apr 17, 2008 2:27 pm GMT

    Alright EA, your number's up. The bloodhounds are out, and they've caught your trail...

  • VolcanoMan001

    Posted Apr 17, 2008 2:03 pm GMT

    Not anti-competitive? Yeah sure, consolidate all sports themed games, one of the biggest revenue earners in the video game industry, into one publisher. Nothing anti-competitive about that! No sir!

  • p0rkp1e74

    Posted Apr 17, 2008 2:00 pm GMT

    Your thoughts betray you EA......we all know why you want in to the T2 business......so you can try and milk a product for all it's worth while spewing out rehashes every year of the same game with a minor tweak here and there.......don't give in T2 stand strong......the force is strong with you!!!!!

  • Taegre

    Posted Apr 17, 2008 1:40 pm GMT

    It just keeps getting more and more tense. It's like a Red Sox/Yankees game: absolutely anything could happen, and now we're in the 9th inning.

  • jay_rock_

    Posted Apr 17, 2008 1:39 pm GMT

    I just want it to be over already....

  • valdarez

    Posted Apr 17, 2008 1:32 pm GMT

    What the heck? Significant shareholder unrest??? Because two major shareholders sold their shares to make a profit? Seriously GameSpot, learn to report the facts, and quit spinning stories in EA's favor.

  • TheEnigma20

    Posted Apr 17, 2008 1:23 pm GMT

    I'm officially boycotting anything made by EA if this goes through and delays GTA 4, forget madden.... oh yea...thas about all there is, that and the sad sight the sims have become, y release 3 packs a month when u could just come out with an actual sequal, EA is all about profit and no talent, if a few people by alot of crappy games their just as happy

  • webdoom

    Posted Apr 17, 2008 1:20 pm GMT

    well at least the FTC wont allow the merger

  • GrgSpunk

    Posted Apr 17, 2008 1:12 pm GMT

    Goddammit...

    WHAT THE HELL WAS THE FED DOING WHEN ALL THOSE OTHER MERGERS WERE TAKING PLACE???

    THEY SHOULD HAVE STEPPED IN WHEN THAT GODDAMN NFL EXCLUSIVITY DEAL WAS TAKING PLACE.

    Holy crap, talk about not striking the iron when it's hot...

  • Jon_Wolfy

    Posted Apr 17, 2008 12:34 pm GMT

    EA says they are not trying to cash in, then why does the deal expire before the release of the game. If they really weren't trying to cash in then they could have just waited until after the release.

  • gamer082009

    Posted Apr 17, 2008 12:27 pm GMT

    Seems to me like EA just wants a piece of that GTA IV pie once it's released. So they're trying to get their grubby hands on Take-Two so they can profit from GTA. EA is trying to figure out how to stay in the game market as long as possible which is why they buy out most of their competitors that may be a threat to them. Instead of taking opposing game company's on and creating notch games they'd rather buyout other game company's instead. EA buzz off!

  • membernametaken

    Posted Apr 17, 2008 12:23 pm GMT

    I can't wait until all this crap is over... i'm so sick of hearing about this merger.

  • XanderZane

    Posted Apr 17, 2008 12:13 pm GMT

    Well, it's not a good thing for gamers when hit titles like NBA 2K, College Hoops 2K, NHL 2K and MLB 2K will be no more if EA gets Take_Two. I can only imagine what EA would do to the GTA series. Look what happened to the Bond franchise. M$ should just buy EA and Take_Two and put an end to this. lol!! That would be cool as ice. M$ would have EA Sports work with 2K Sports to make the best sport games ever. lol!! Anyway, I don't see how EA can get Take_Two. Even if shareholders take EA's offer, the "poison pill". with prevent EA from ever owning more then 40% of the company. Take_Two could easily sell Rockstar to another company after they profit from GTA IV.

  • _Elite_Bushido_

    Posted Apr 17, 2008 12:11 pm GMT

    EA couldnt care less about what happens to TT, they just want the sales of GTA IV and to get rid of NBA 2k which has been beating their horrible NBA Live game for years now.

  • Icehearted

    Posted Apr 17, 2008 12:09 pm GMT

    "anticompetitive implications", that's my term for the day!

    Take that EA!

  • mrzero1982pt2

    Posted Apr 17, 2008 12:07 pm GMT

    thats the hidden clause in this. ea will buy take 2, but the folks at take2, rockastar, 2kgames, and kush, and take 2's other studios will all jump ship. ea will have names, and no talent, which will eventually leave electronic farts dead in the water

  • graze81

    Posted Apr 17, 2008 12:04 pm GMT

    When, not if, EA buys TT, RIP sports gaming. I liked having EA and 2k duel over hockey games every year, it was nice having a choice. I hope thats whats the FTC is looking at, because then EA would have a monopoly of offiical licenced sports games.

  • Gamakarmica

    Posted Apr 17, 2008 11:44 am GMT

    Unfortunately, the FTC won't have any grounds to deem this merger to be anti-competitive. Case in point: There are other American gaming studios that create games, thus it's not monopolizing the market.

    Besides, Take2 getting bought out might end up being the best thing for T2, since a good amount of their products have fallen by the wayside (i.e., MLB 2K.

  • EddyG0RD0

    Posted Apr 17, 2008 11:36 am GMT

    i HATE EA

  • diablobasher

    Posted Apr 17, 2008 11:35 am GMT

    GO AWAY EA!!!!

    You are NOT going to get your single console market wish and dominate the entire global industry. If Take 2 and it's shareholders dont beat you down, then the anti monopoly laws across the globe will.

  • HellRazer360

    Posted Apr 17, 2008 11:29 am GMT

    k

  • trippleclick

    Posted Apr 17, 2008 11:22 am GMT

    I doubt this will become "video game" history IMHO. It's clear from TT that they're taking their talent elsewhere IF this buyout occurs. The only thing EA will own is their names. Empty shells, thats all.

  • Phazevariance

    Posted Apr 17, 2008 11:19 am GMT

    So.. is EA goign to be in an anti-competitions lawsuit soon.. I mean, monopolizing the competition is illegal is it not?

  • Nineball2112

    Posted Apr 17, 2008 11:16 am GMT

    Another interesting twist in the EA / TT buy-out story.

    Hmmm, this whole thing could easily be turned into a story line for a video game...

  • DevilD2005

    Posted Apr 17, 2008 11:11 am GMT

    BK sleeper, I agree 100 percent with what you said.

  • DevilD2005

    Posted Apr 17, 2008 11:10 am GMT

    This is sad, however If EA never attempted the buyout, neither company would be feeling the backlash of the offer. Take 2 is losing its ground and all they want to do is keep doing what they have been doing. In essence its all EA's fault. Personally, I hope in the last moments Take 2 will continue its course and EA will be beaten back.

  • ocdog45

    Posted Apr 17, 2008 11:09 am GMT

    SCREW EA!!!! thats all i have to say

  • dmish82

    Posted Apr 17, 2008 11:08 am GMT

    I have a feeling this could be very, very bad.

  • BK-Sleeper

    Posted Apr 17, 2008 11:05 am GMT

    Keep your eyes open and ears up, boys.
    The next few days will become video-game history, whether good or bad.
    I know it sounds crazy, but gaming may change overnight as we know it.

  • ichiban30

    Posted Apr 17, 2008 11:01 am GMT

    don't sell! keep it going T2!

  • Citan76

    Posted Apr 17, 2008 10:58 am GMT

    I hope Take-Two refuses the offer, I want to see what happens when they call EA's bluff. If that is indeed what it is. Will EA just say "whatever" and drop the deal or will they just get more aggressive or make a better offer? I want to see this drama go further. However I think Take Two will not be able to convince the shareholders.

  • pungaboy

    Posted Apr 17, 2008 10:55 am GMT

    See that's what I've always said; there aren't enough lawyers in the videogame industry. That's exactly what we need.

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