EA: 'We Are Stepping Away' From Take-Two

Electronic Arts will allow its $25.74 per share tender offer for Take-Two to expire tonight at midnight without re-issuing, the company confirmed today. The two companies failed to reach an agreement since EA made its initial bid in February of this year. The bid went hostile in March, though relatively few shareholders have yet tendered to EA. The $2 billion tender offer has remained through numerous deadline renewals and extensive requests for information by the FTC, while Take-Two board chairman Strauss Zelnick repeatedly stated that EA's offer undervalued his company. Throughout the process, EA often stressed the time sensitivity of its offer. "We've been pretty consistent about this from the start," EA corporate communications VP Jeff Brown told Gamasutra. "All along, we said that the model was dependent on getting their titles for distribution for Christmas this year." "It is now clear we passed a threshold, and that's not going to happen. With that, it changes our economics and we are stepping away." However, Brown says that Take-Two has offered EA its due diligence to review and discuss. "They've invited us in, and we're taking advantage of that opportunity," says Brown. "We are hopeful that diligence will support the price of $25.74 [per share]," says Brown, though he declined to speculate on whether he expects the two companies to reach an acquisition agreement. Take-Two's share price currently stands at $23.30 per share, lower than EA's offer, though during Grand Theft Auto IV's release date, it had traded as high as $27.00 per share. Gamasutra has contacted Take-Two for comment and will update with any further information we receive.