EA Drops Take-Two Plans News

In a surprising move, Electronic Arts has today confirmed that it has aborted plans to acquire Take-Two Interactive, ending months of deadlines, SEC filings, and letters between the heads of both companies.

Dropping the pursuit of Take-Two after "careful consideration and [a] review of other due diligence materials provided by Take-Two", EA chief, John Riccitello released a statement, commenting:

"EA is tracking toward a record breaking year. We're launching 15 new games including award-winners like SPORE, Dead Space and Mirror's Edge, great new titles from the Sims, new family titles with Hasbro, and the highest quality slate of EA SPORTS titles on this generation of consoles. We're also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online."

In response to EA's move, Take-Two has issued statements of its own, revealing the board's next moves.

Strauss Zelnick, Chairman of the Board of Take-Two, commented, "We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders. As part of that commitment, we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives. We're especially proud of the success we've enjoyed over the past eighteen months and we remain confident in our ability to generate value for stockholders."

"Take-Two's business has continued to strengthen since the time EA first made its offer. We have delivered terrific products to our consumers and we've been rewarded with very strong financial performance. We have an exciting future ahead of us, powered by our profitability, a significant cash position, the absence of debt, an undrawn credit facility and a terrific lineup of games. We are confident in the unique value of our business given our strong position in what is a growing and dynamic industry," said Ben Feder, Chief Executive Officer of Take-Two.

EA's statement certainly isn't giving away much, though it's worth pointing out that Take-Two's share price has dropped in recent weeks from $25 each to below $22. Highs of around $27 a share were reached off the back of GTA IV's release in the spring.