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Video-game publisher Electronic Arts(ERTS - Cramer's Take - Stockpickr) wants to add Grand Theft Auto to its lineup by purchasing rival Take-Two Interactive Software(TTWO - Cramer's Take - Stockpickr).
Redwood City, Calif.-based EA Sunday made public a $2 billion all-cash offer it had submitted to Take-Two last Tuesday.
The move is another sign of consolidation in the video-game industry. Vivendi is in the process of merging its games division with Activision(ATVI - Cramer's Take - Stockpickr) to create a potent rival to EA with a roster including Guitar Hero, Call of Duty and World of Witchcraft.
Under the deal, EA would pay $26 for each share of Take-Two, a roughly 50% premium to the $17.36 level at which Take-Two shares closed Friday.
EA, whose hit games include Sims, says it decided to publicize its bid in order to appeal to Take-Two's shareholders after the latter's board nixed it.
"Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders," said Electronic Arts CEO John Riccitiello in a news release announcing the bid. "Take-Two's game designers would also benefit from EA's financial resources, stable, game-focused management team, and strong global publishing capabilities."
On Sunday, Take-Two reiterated its opposition to the deal, claiming it undervalues Take-Two relative to its publicly traded peers.
"We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry," Take-Two said in a news release.
Electronic Arts shares closed 79 cents higher Friday at $49.74.
Redwood City, Calif.-based EA Sunday made public a $2 billion all-cash offer it had submitted to Take-Two last Tuesday.
The move is another sign of consolidation in the video-game industry. Vivendi is in the process of merging its games division with Activision(ATVI - Cramer's Take - Stockpickr) to create a potent rival to EA with a roster including Guitar Hero, Call of Duty and World of Witchcraft.
Under the deal, EA would pay $26 for each share of Take-Two, a roughly 50% premium to the $17.36 level at which Take-Two shares closed Friday.
EA, whose hit games include Sims, says it decided to publicize its bid in order to appeal to Take-Two's shareholders after the latter's board nixed it.
"Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders," said Electronic Arts CEO John Riccitiello in a news release announcing the bid. "Take-Two's game designers would also benefit from EA's financial resources, stable, game-focused management team, and strong global publishing capabilities."
On Sunday, Take-Two reiterated its opposition to the deal, claiming it undervalues Take-Two relative to its publicly traded peers.
"We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry," Take-Two said in a news release.
Electronic Arts shares closed 79 cents higher Friday at $49.74.
