Security and Exchange Commission filings by Take-Two reveal the publisher spent $11.1 million to keep Electronic Arts at bay during its seven-month-long takeover attempt. Gamespot reports that Take-Two incurred the costs during the "strategic review process" of the EA offer.
For better or worse for investors, Take-Two won its battle against EA and remains independent. Although, investors can't be too happy to see the stock they could have gotten $25.74 for during the EA offer currently trading around $8 per share*.
*In fairness, game stocks in general are down. Apparently something to do with an economic crisis.
[Via GameDaily]
Reader Comments (18)
Posted: Dec 22nd 2008 5:26PM FredFredrickson said
Grand Theft Auto 5?
I still think they'll get a lot of GOTY awards for GTA4 as well, so if they can find anyone out there who doesn't already own the game after those awards are doled out, they should be good.
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I still think they'll get a lot of GOTY awards for GTA4 as well, so if they can find anyone out there who doesn't already own the game after those awards are doled out, they should be good.
Posted: Dec 23rd 2008 9:30AM (Unverified) said
Game stocks are like movie stocks: blockbusters don't make your stock go up, systemic success does.
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Posted: Dec 22nd 2008 5:25PM FredFredrickson said
Sounds kinda like what happened to Yahoo! after they refused Microsoft' buyout... but I don't expect that Take-Two will slump the same way Yahoo! did after that fiasco.
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Posted: Dec 22nd 2008 7:09PM (Unverified) said
Technically yes, but you have to figure how much EA spent during the same time period. I would wager it was more than the $11M that Take-Two is reporting to the SEC.
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Posted: Dec 22nd 2008 9:19PM (Unverified) said
What? I don't get it. How come Take-Two had to spend money to NOT get sold? Can someone quickly explain to a confused fifteen year old?
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Posted: Dec 23rd 2008 5:11AM Vanillacide said
Management of a company is different to the owners of a company. The owners are the shareholders, and management runs the company on the shareholders' behalf.
Another company may offer to buy the shares of a company (i.e. a takeover, otherwise known as Merger or Acquisition), and will offer say $25 per share to shareholders; the shareholders then vote to accept the offer, if a certain threshold is passed the offer is accepted and all shares are sold.
Management typically don't like the sound of this, because they could lose their jobs, so they fight the take-over and prevent the owners of the company from selling it. Take-Two's management did this to the tune of $11-million.
Reply
Another company may offer to buy the shares of a company (i.e. a takeover, otherwise known as Merger or Acquisition), and will offer say $25 per share to shareholders; the shareholders then vote to accept the offer, if a certain threshold is passed the offer is accepted and all shares are sold.
Management typically don't like the sound of this, because they could lose their jobs, so they fight the take-over and prevent the owners of the company from selling it. Take-Two's management did this to the tune of $11-million.
Posted: Dec 23rd 2008 1:30AM Blinguskahn said
The 11 Mil I bet had mostly to do with legal fees. Inunctions, lawyers and paying off the right people to keep the takeover from happening.
As a side note, THANK GOD EA failed. Imagine how horrible Bioshock 2 and GTA5 would have been under EA. Not to mention that EA would have just used 2K's sports engines for all their franchises and sunk NBA, NHL, MLB 2Kx for ever.
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As a side note, THANK GOD EA failed. Imagine how horrible Bioshock 2 and GTA5 would have been under EA. Not to mention that EA would have just used 2K's sports engines for all their franchises and sunk NBA, NHL, MLB 2Kx for ever.
Posted: Dec 23rd 2008 5:13AM Vanillacide said
This is the management of Take-Two spending $11-million of shareholders funds to prevent the shareholders accepting an offer from EA.
Shareholders would have received $25.74 per share, but now they are worth approximately $8 each; I bet shareholders are not at all happy with Take-Two's management.
Classic demonstration of the 'agency problem'.
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Shareholders would have received $25.74 per share, but now they are worth approximately $8 each; I bet shareholders are not at all happy with Take-Two's management.
Classic demonstration of the 'agency problem'.
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