After rejecting Electronic Arts’ $2 billion buyout offer (again) this morning, Take-Two Chairman Strauss Zelnick caught up with investors at a Bank of America conference this afternoon. But he didn’t say much that we didn’t already know: The bid was the wrong price at the wrong time, ‘Grand Theft Auto IV’ will jack shares higher than the $26 EA (ERTS) was offering, and Take-Two (TTWO) is willing to talk about strategic offers on April 30, one day after the release of GTA IV.
Live notes: (slides here)
2:50: EA bid is inadequate in multiple respects — Strong portfolio, and great revitalization plan, and uniquely configured to deliver stockholder value. Timing of bid is “inappropriate, unfortunate and opportunistic.“
2:52: EA sees the value of the company, especially after the release of GTA IV, and that’s why they’re unwilling to wait. The market doesn’t see the value of the company.
2:54: Willing to start informal discussions now to pursue “all the strategic offers.” Willing to start formal discussions on April 30, one day after GTAIV gets released. “Absolutely 100% committed to doing the right thing for stockholders.”
2:57: “We have 15 franchises that we own that are 1 million unit plus selling franchises.” Over 50% of franchises are owned intellectual property.
3:00: Sports: “After years of heartache we’re really hitting our stride. Our ratings are higher than our competition. We think we can do much more of that. Sports will be contributor to profitability in the coming year. Sports is uniquely valuable to EA.”
3:08: Analysts: $50-$210 million of expected synergy between EA and Take-Two. Value for synergy alone is $6-$29/share, according to analysts.
CEO Ben Feder: Nothing will derail April 29 launch of GTAIV.
End of Q/A
UPDATE: Electronic Arts released a statement criticising Take-Two’s reaction to the bid. No surprises in the statement, just the same thing we’ve heard since the beginning:
“EA’s offer price of $26.00 per share is full and fair, and reflects the value of Take-Two’s intellectual properties, talent, and operational progress. By advising its stockholders to reject the offer, Take-Two’s Board is exposing them to further delays which may reduce the value and the certainty of a potential transaction.”