Yesterday Take-Two shareholders approved a compensation package for its managers which also effectively told Electronic Arts to take a hike. EA’s (ERTS) response this morning: Why don’t you take another month to think about it?
EA has extended the deadline on its tender offer, which was set to expire at midnight tonight, until “midday” May 16.* As we noted yesterday, by accepting the new comp package, which creates an additional 2 million shares, Take-Two (TTWO) shareholders also reduced the value of EA’s offer from $26 a share to $25.74. But EA’s aggregate offer of $2 billion cash still stands.
And again, we think the most important numbers won’t show up until the beginning of May, when the market digests preliminary sales results from Grand Theft Auto IV.
* Yesterday we hallucinated and mistakenly reported that EA had extended the deadline for the tender offer. We’d argue that we were “directionally correct”, but whatever. We got it right this time.
UPDATE: Take-Two predictably said that the new, lower per-share bid isn’t high enough. Strauss Zelnick:
“[EA’s proposal] undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74,”
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