Well the wait is over. Seems that EA is finally letting Take-Two slip from its giant fingers because that little offer that EA was making for Take-Two has expired and EA isn’t going to do anything about it. Seems they’ve given up and are dropping out of the race. In a letter sent on August 15 from John Riccitiello, Chief Executive Officer of EA, to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two, the two discussed EA’s offer to acquire Take-Two and over the weekend came to the conclusion that EA would be letting the bid expire.
But wait, there’s more. Maybe the ol’ Road Runner/Wile E. Coyote image might not be entirely out of rotation here. EA has agreed to listen a management presentation by Take-Two containing non-public information including their game release plans through 2011. So basically EA could make another offer if they think that Take-Two has something to offer in these post GTA4 days and only time will tell if I will be able to steal Thom’s photoshopping work yet again. If you want to know how insanely rich gaming CEOs write to each other, the letters follow.
August 18, 2008
Mr. Strauss Zelnick
Executive Chairman of the Board of Directors
Take-Two Interactive Software, Inc.
New York, NY 10012
Thank you for taking my call on Friday and for your response letter on August 17, 2008.
As discussed on Friday, given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash. In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season. Accordingly, we require due diligence to support a transaction and are therefore letting the tender offer expire tonight. However, we are pleased to accept your offer to review your management presentation as outlined in your letter.
We continue to have great respect for Take-Two’s creative teams and products and are hopeful that we can work together to reach a mutually agreed transaction.
Chief Executive Officer
Below is the text of the letter sent yesterday by Mr. Zelnick to Mr. Riccitiello:
August 17, 2008
Mr. John S. Riccitiello
Chief Executive Officer
Electronic Arts Inc.
209 Redwood Shores Parkway
Redwood City, CA 94065
Thank you for your recent expression of interest for Electronic Arts Inc. (“EA”) to participate in Take-Two Interactive Software, Inc.’s (the “Company”) formal process to evaluate the Company’s strategic alternatives. As you know, we have been willing to have EA participate in this process following the successful launch of GTA IV, and we are happy to include EA now.
As I mentioned when we spoke on Friday, our process begins with an in-depth management presentation. The Company has made significant strides since EA first expressed interest in the Company and this presentation includes material non-public information to which you would not otherwise have access, including information relating to our three year product release schedule and management’s financial projections. The presentation also includes information about the underlying factors that have driven our strong operational and financial performance. I believe our presentation will enable you to understand better the value of our Company to EA.
Prior to the management presentation, we will only require EA to enter into a confidentiality agreement. The agreement would be limited to provisions required to comply with federal securities laws and to ensure the Company’s ability to protect the confidentiality of the information shared with you. I can assure you that this requirement is the same as or more favorable to EA than that which we have employed with all other participants in the process.
We understand that a number of months have passed since you first expressed interest in the Company and, accordingly, we will act quickly to assist you in moving through our process. Once we execute a confidentiality agreement, we are prepared to schedule the management presentation immediately.
With my best personal regards.
Executive Chairman of the Board