http://www.next-gen.biz/index.php?option=com_content&task=view&id=9712&Itemid=59
By Tom Ivan
The board rejected EA’s offer of $26.00 per share in cash as being not in the best interests of stockholders, and recommended that stockholders not tender any of their shares to EA. It also confirmed that “it will explore alternatives to maximize value for stockholders, which may include a business combination with third parties or with EA, remaining independent, or other strategic or financial alternatives that could deliver higher stockholder value than the current EA offer.”
The board reiterated that it has received indications of interest from third parties with respect to possible business combinations since EA’s bid, but that no substantive discussions have yet taken place. It also said it was not willing to enter into a strategic business combination prior to the April 29 release of Grand Theft Auto IV.
“To facilitate its efforts to explore alternatives to maximize stockholder value, the company has begun to assemble the materials necessary for interested parties to conduct due diligence," Take-Two said in a statement. "Prior to the release of Grand Theft Auto IV, the company is willing to enter into confidentiality agreements on customary terms and to engage in preliminary conversations with interested parties, including EA.”
Take-Two chairman Strauss Zelnick said, “Our Board, after careful review, has unanimously determined that Electronic Arts’ offer continues to provide insufficient value and remains opportunistically timed to capture the value of the upcoming Grand Theft Auto IV launch at the expense of our stockholders.
“Our stockholders’ interests would hardly be served by accepting an offer from EA at the wrong price and the wrong time. As a result, the board recommends that stockholders not tender any of their shares to EA.”
Take-Two also announced that its board of directors has adopted, in response to EA’s unsolicited tender offer, a Stockholders Rights Agreement to protect stockholders against, among other things, unsolicited attempts to acquire control of the company at an inadequate price.
"The board of directors has committed to redeem the rights distributed pursuant to the Rights Agreement 180 days after adoption of the Agreement.
“Under the Stockholders Rights Agreement, the rights will become exercisable if a person becomes an "acquiring person" by acquiring 20% or more of the common stock of Take-Two or if a person commences a tender offer that could result in that person owning 20% or more of the common stock of Take-Two. The Stockholders Rights Agreement will not apply to existing stockholders who own 20% or more of Take-Two’s existing common stock, unless and until they acquire an additional 2% of Take-Two’s outstanding common stock.”
Zelnick commented, “We have adopted this short-term Stockholders Rights Agreement in order to guard against a takeover by EA at the current, inadequate price. We believe the Rights Agreement will ensure that the Take-Two Board has adequate time to consider all strategic alternatives for maximizing value for Take-Two stockholders. The Agreement will not, and is not intended to, prevent a takeover of the company on terms that are fair to and in the best interests of all stockholders.”
