Call it a flashback to the Microsoft-Yahoo takeover battle. On Sunday Electronic Arts announced a proposal to acquire Take-Two Interactive Software in an all-cash merger valued at approximately $2 billion. In true Yahoo style, Take-Two said the proposal is inadequate and not in the best interests of its stockholders.

Letting Stockholders Know

EA’s proposal of $26 per share is a premium of 64 percent by Take-Two’s closing stock price on Feb. 15 and 63 percent by Take-Two’s 30-day trailing average price ending on that moment.

Take-Two did not solicit the deal, and EA did not publicize its Feb. 19 offer — until it was rejected. That’s when EA decided to release the letter and bring its proposal to the attention of all Take-Two stockholders.

“Our all-cash proposal is a rare opportunity for Take-Two shareholders to realize instant value at a substantial premium, while creating long-term value for EA shareholders,” EA CEO John Riccitiello said. “Take-Two’s game designers

would plus benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.”

An ‘Opportunistic’ Proposal

Take-Two’s board of directors said it thoroughly reviewed EA’s unsolicited proposal with independent financial and legal advisers and concluded that the proposal is inadequate. Specifically, Take-Two said, the offer undervalues its franchises. Take-Two called EA’s offer “highly opportunistic” and one that attempts to “take advantage of our upcoming release of Grand Theft Auto IV.”

“In addition to undervaluing key elements of our business, EA’s proposal fails to recognize the value we are building through our ongoing turnaround efforts, which will further revitalize Take-Two,” said Strauss Zelnick, Take-Two board chairman. “While we have made substantial progress already, the turnaround of our business which we initiated in June is not yet complete, and we believe its benefits have not been recognized in either our current stock price or in the value of EA’s…

Orginal post by Top Tech News