Electronic Arts (ERTS) may extend offer for Take-Two (TTWO)
Posted by: admin in Industry NewsFiled under: Deals, Industry, Electronic Arts (ERTS)
Take-Two Interactive (NASDAQ: TTWO) has launched its important new “Grand Theft Auto IV” franchise and it has done remarkably well. It didn’t cause a big bump in the firm’s stock, which has only moved from $26.62 three weeks ago to $27.10.
The company’s one suitor, Electronic Arts (NASDAQ: ERTS), had already taken the shares up from from under $18 with its buyout offer. Most analysts believe that the offer will be extended because Take-Two has resisted a buyout.
According to The Wall Street Journal, there is a “belief among Take-Two management and some of the company’s shareholders that the company deserves a higher offer from EA. “
No matter what Take-Two believes, EA’s ideal move now is probably not to extend the offer but, instead, to walk away. The Take-Two share price would be very apt to move back below $20, which would pressure the company’s board to do something to move the share price back up again.
EA’s shareholders are ill-served if the company extends its offer. Without a buyer, Take-Two might have to come to the negotiating table and Electronic Arts could get a better deal.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
Entries (RSS)