EA lowers Take-Two bid
EmptySales of video game hardware, software and paraphernalia are booming, but against this backdrop, Electronic Arts has lowered its per-share bid to acquire Take-Two Interactive Software.
EA said Friday that, due to the issuing of some 2 million additional shares as part of an incentive plan, it's offer for Take-Two is now $25.74 per share, down from $26 though still a $2 billion price tag for the company.
EA also said that it has extended its unsolicited offer, which was to expire Friday, until May 16. That's a victory of sorts for Take-Two, considering that Take-Two chairman Strauss Zelnick has insisted that negotiations for a sale of the company should take place after the April 29 launch of "Grand Theft Auto IV."
The world's largest video game company has been trying for months to persuade Take-Two shareholders to accept its offer, but EA said Friday that only 6.4 million shares have been tendered its way, less than 9% of the float.
Making it rough for EA is the fact that many large shareholders cashed in their Take-Two holdings just after EA's offer was made public and the stock popped more than 50%. Those shares ended up in the hands of arbitrageurs who aren't likely to tender their shares to EA for a profit of just 50 cents or so per share.
That's why Take-Two shares were at $26.20 in after-hours trading Friday, indicating an expectation that EA will raise its offer beyond the current $25.74.
Late last week, March sales data from NPD Group showed 51% sales growth for the video game industry over a year ago, an especially healthy gain amid media hyperventilation about a weak U.S. economy. And things ought to stay strong with "GTA IV" coming soon; it is expected to be the year's biggest-selling game.
NPD said software sales were up 63% to $946 million in March, hardware sales rose 46% to $551 million, and accessories surged 58% to $220 million.
Nintendo was the biggest winner, with its Wii console selling 721,000 units and the DS system selling 698,000, well ahead of third place Sony's 297,000 PSP units sold.
Plus, Nintendo's "Super Smash Bros: Brawl" blew away the software competition by selling 2.7 million units in March, about 400,000 more units than all of February's Top 10 titles combined.