EA takes out $1 billion loan for Take-Two acquisition

by Alexander Sliwinski on May 10th 2008 3:00PM

Electronic Arts has received commitments for a $1 billion loan from various financial institutions toward its acquisition of Take-Two. The company has up until January 9, 2009 to tap the funds in its $2 billion hostile takeover and there's been no update on the deal since Take-Two's last rejection.

GamePolitics spoke with Wedbush Morgan analyst Michael Pachter who says that after the Pandemic/BioWare acquisition that EA is a little strapped for cash. He believes the timing of this loan isn't "particularly unusual" and it could be possible that EA might make a higher bid for Take-Two.

Source

Tags: ea, Electronic-Arts, loan, take-two, takeover

Reader Comments (91)

I really hope this takeover doesn't happen.

I pray it doesn't happen. LEAVE TAKE TWO ALONE E FUCKIN A. WHY DONT YOU GUYS JUST GOO AWAY.

Fuck EA.

I concur with your view.

Exactly.. don't fall into EA's business model of mediocrity and rehashing of old product on a yearly basis with minimum investment. When is the last time EA produced a hit on the scale of Halo, Call of Duty, Uncharted, Bioshock, Gears of War, etc...

This has got me really down - it's pretty much confirmation that the takeover will definitely happen.

Coming soon to our lineup: The Sims 2: BioShock fashion stuff!

And the hotly anticipated Grand Theft Crysis!

I agree. Fuck EA!

Maybe I'm a Sony Fan but the only video game company I really dislike and hate is EA.

So yeah fuck EA!

EA is clearly not getting the message though...

I never thought I could hate someone as much as I hate sony and the sony fanboys...

I still hate you more than EA, prematureAss.

High risk amounts of money, could break em if anything goes wrong... with luck

We can try writing to EA, calmly and rationally, explaining why we, their paychecks, do not want this to happen.

Failing that, spam.

I hope EA Fifaise the GTA series.

I hope YOU fall down a well.

When all else fails, throw money at 'em! This is worse than the Yahoo! buyout by Microsoft.

JOYSTIQ STAFF

I find more and more often when trying to rank comments up ie: joe's Im treated with a black screen. Anyone else having the same prob?

It took me a while to figure this out, why sometimes i got an advertisement and others i just got a black screen, but you have to scroll all the way to the top of the page when you get the black screen. A skip advertisement button can be found there

However, i still disapprove. I expect such irritating page ads from IGN, not from y'all

Eh, if you're using Firefox, get NoScript + Adblock Plus, I don't get any ads using those.

The skip ad button does NOTHING for me, the ad still plays. WTF!

Yes, black screens are occuring all the time with me too.

same here ... I thought it was just me ... I just reload the main page

Yeah, come on guys, can you at least pretend you're trying to address ther issue of these adverts. I wouldn't mind (we all need to support the site) but they keep appearing when I vote comments up or down, which means I'm starting to get put off doing it cos it happens so often.

Yeah, that and there is also the problem that when you click on the link in the email you're sent when someone replies to your comment, it doesn't take you to the right page.

You are out of your mind if you are a Take Two shareholder and sell your stock.

They'll come down off the GTAIV high by the start of 2009, and unless they lean on Rockstar to shove something else out the door, TakeTwo will, unless they work hard to reorganize between now and then, return to their financial instability

Take Two's got a window of stockholder satisfaction to try to secure future growth and security that is not dependent on one franchise, they had best make use of it

I agree with Mr Khan, GTA IV has been and gone and the T2 share price hasn't really moved, it was already artificially high thanks to the anticipation of GTA IV.

If I had stock in T2 I'd seel right away, the price isn't going to go up any further and they don't have anythign on the horizon big enough to warrant hanging on. Bioshock 2 is a long way off, their sports brand isn't too strong sales wise and I don't think they would be worth even half the price EA are offering if it wasn't for Rockstar North.

Although I would hate for this to go ahead, no way would EA ever give R*N 4 years to create a game.

I would not sell the stock ... There is a Bioshock movie in the works, LA Noire and another unnamed PS3 exclusive project ... Its a very steady brand and it will continue to grow ... Wait until the official NPD numbers come out for GTA IV

I agree, TakeTwo's holdings are a very steady brand, but they just can't get their financial shit together, and that's all the investors care about in the end

Ok John, IF the Bioshock movie is made and is successful, let's say it'll take about $300 million at the box office (which is generous), how much do you think T2 will see of that? You're probably looking at less than $20 million which isn't a lot of money when you look at the $2 billion being offered.

We know next to nothing about LA Noire and this 'un-named PS3 exclusive' and you can't forecast for new IPs so far from completion.

voodoo,

" let's say it'll take about $300 million at the box office (which is generous)"

http://www.imdb.com/boxoffice/alltimegross?region=world-wide

you probably mean US Box Office, Worlwide Im pretty sure it would make much more than that

"how much do you think T2 will see of that? You're probably looking at less than $20 million which isn't a lot of money when you look at the $2 billion being offered."

wow, they would be looking at more far more than 20 million, that is if they play their cards well.

Its not only that, movies are a HUGE advertising business, with a movie comes the rest of the memorabilia, including DVDs, and so on...not only that, but a Bioshock movie would also be a huge advertisement for Bioshock 2...

Look, shareholders are doing well by not selling their T2 stock, they have all the necessary cards, they just need to play them well, but yah, this also means that if they make one wrong move with their key franchises (bad movie or bad game), they will most likely be fucked.

noshino,

there's a reason the movie business is in libo right now, cuz films dont make money. the net profit made from a film, even a blockbuster one, isn't enough to recoup losses made on all the other unsuccessful movies funded by a major studio.

so a bioshock movie, which im sorry to inform you, is a "hardcore" gamers' game. isn't gonna have any major affect on T2 stock prices. even with ancillary sales, none of that matters.

also, as much as i love my 2k sports series, they dont sell enough to make a dent either.

that's my biggest fear of the takeover..EA just flat-out shutting down thier sports game competition.

i utterly refuse to play NBA live. the buggiest sports game on the planet.

limbo*

The movie license is pure profit. Lets do some math for everyone.

http://www.forbes.com/technology/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html

Based on Forbes calculation for revenue breakup of who gets what from a game ... the publisher and distributer gets 1.5% or for Take 2, 3% since they are both.

So a $60 game would make Take 2 $1.80 per game sold.

If the BioShock Movie license was sold for $10 Million + 10% Gross Revenue of movie (Halo Movie Deal), then we are looking at the equivalent of 5.5 Million games shipped ...

If BioShock Movie was $25 Million with no royalty payments, then that is equivalent of ~14 Million units shipped.

This is pure money. This is more than EA has made for the last 3 quarters. This is worth a lot since it is pure money, and if BioShock does well, then the sequel is gonna cost a lot more.

gnawkz, it is no where near that simple.

first off it cost like..20-35 mill to make a top tier game? ( being very conservative), while a blockbuster film costs 180+ mill and the avg film in general is around 60 mill.

that's a *huge* disparity in budget. so even if bioschock makes 200 mill at the boxoffice, if it costs 180 mill to make it the net profit is chump change.

and thats the case with most films and thus why the film industry is in trouble and is financially ass backwards.

Well I still would not sell my stock in T2 ... Interesting point made about Bioshock 2 as well coming out around the Bioshock movie ... Seriously though any fan of games should wish EA never gets T2 ... I know thats not the scope of this particular conversation but then EA will have a monopoly on sports games ... Lets not forget T2 also has visual concepts under its umbrella which makes games like NBA 2k, MLb 2k, Virtua Tennis among others

EA are totally monopolizing the videogame market. The EU would never allow this, I reckon the US's competition laws are in need of upgrade.

First they came for Take Two, and I didn't speak up because I was too busy playing Grand Theft Auto...

Then they came for Ubisoft, and I didn't speak up because I was still too busy playing Grand Theft Auto...

[+1] but dude, that's not cool.

Then they came for Activision and I didn't speak up because I was busy killing hookers.

Then they came for Blizzard and I didn't speak up because I was running from 3 helicopters and 6 stars.

Then they came for my wallet, and there was nobody left to speak up.

Well, except Jack Thompson.

Yes, the Holocaust was the first thing that came to mind when I heard of a potential EA buyout.

Snap!

They can't take a no for an answer. :P

"We have 30 days to raise 2 billion dollars to prevent a takeover. Any ideas how to raise it?"
"How about an all Male carwash?"
"Ok! Let's do it!"

Ask chef to whore himself out to all the women in the world.

Let's get Elton John too!

well you could whore yourself out to a 1000 fat chicks for 50 bucks a piece. of 50 really fat chicks for 1000 bucks a piece!

what?

fat chicks need love too

GODDAMMIT. I hate, hate, hate EA.

Can you see the next GTA with nothing but in game advertising rather than the made up advertising? Welcome to the world of EA.

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EA takes out $1 billion loan for Take-Two acquisition

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