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"We have been willing to have EA participate in this process following the successful launch of GTA IV, and we are happy to include EA now.”
——Strauss Zelnick

THE GAMES PEOPLE PLAY

It’s Madden Vs. Grand Theft Auto in a Tense Contest Being Played Out on Wall Street
Electronic Arts said yesterday that it would let its offer of $25.74 per share to acquire rival Take-Two Interactive to expire last night at midnight. EA initially made a $2 billion bid for Take-Two in February, and has extended the expiration date on that offer more than once.

"Given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash," EA CEO John Riccitiello wrote in an open letter to Take-Two Chairman Strauss Zelnick. “In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season”

Nonetheless, talks are ongoing. After a phone exchange Friday between Riccitiello and Zelnick, EA said it had accepted an offer from Take-Two to view a presentation that will include product-release schedules, financial projections and other information intended to give EA a better understanding Take-Two's value, the Wall Street Journal reported.

Said Riccitiello in the same letter: “We continue to have great respect for Take-Two's creative teams and products and are hopeful that we can work together to reach a mutually agreed transaction.”

Take-Two had previously said EA's offer undervalued the company, and aimed to take advantage of the impending release of its Grand Theft Auto IV.

"We have been willing to have EA participate in this process following the successful launch of GTA IV, and we are happy to include EA now," Zelnick wrote in response to Riccitiello's letter.

Added Take-Two CEO Ben Feder: "We are continuing to consider all alternatives that will maximize value to our stockholders. As part of that commitment, we are engaged in discussions with other parties as part of a formal process to generate greater value and will act quickly to assist EA in moving expeditiously through our process."

Wedbush Securities analyst Michael Pachter called the withdrawal of the offer a “red herring,” telling WSJ: “"I think they are doing this to allow Take-Two management to save face and negotiate a higher price."

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