‘GTA’ Game Makers Turn Down $2 Billion Offer From EA

By Randall Stevens  |  02/26/2008

The makers behind the hugely popular video game, "Grand Theft Auto," says Electronic Arts' (EA) $2 billion offer to buy them is too low.

According to a report from CNN.com, Take-Two Interactive (GTA developers) said the offer is "the wrong price at the wrong time," after the news of the $26-per-share bid sent Take-Two's shares up 55 percent to a $26.89 close.

The "GTA" franchise has sold more than 65 million copies since the first in its series of titles.

Take-Two feels that EA is undervaluing the company, and while they are still open to more discussions with EA, they want to wait until April 30th, after their latest 'GTA' title hits stores.

EA, however, said the wait may cause them to lower their bid.

"There can be no certainty that in the future EA or any other buyer would pay the premium we are proposing today," EA's CEO John Riccitiello said during a conference call, according to CNN.com.

"We believe our proposal is fully priced," he said. Since "Grand Theft Auto IV" should be close to completion, he added, the buyout bid "would not jeopardize the development of this incredibly important title."

Take-Two called the timing of EA's unsolicited offer "opportunistic" due to it being so close to the release date of the "GTA title. EA, however, said its bid came now because they want to be able to implement its marketing muscle for the game before the holiday season -- which is when video game companies make the bulk of the profits.

While most people believe that the deal is focused on the "GTA" franchise, analysts say -- according to CNN -- that EA has most to gain by owning Take-Two's sports business.

"For EA, the best asset is sports," Michael Pachter, an analyst with Wedbush Morgan Securities, told CNN. "And that's why there won't be a higher offer [from another company]. No one else will value sports higher."

EA already owns the Madden NFL and FIFA Soccer franchises, but would dominate the sports game arena id they also owned Take-Two's baseball, basketball and hockey titles.