“Poison Pill” shareholder clause adopted
Take-Two Interactive is on the defensive after Electronic Arts ramped up efforts to takeover the company.
The $2 billion offer by EA is considered by analysts to be the best Take-Two can get. But the company and their financial advisors, Lehman Brothers and Bear Stearns, are in agreement that the offer, more than 60 percent over the Take-Two share price at the time (and now about on par with the $26 a share offer as stocks closed today) is “inadequate.” (Let’s not forget, Bear Stearns also happened to be in a bit of a financial bind of late; the US government had to facilitate an emergency buyout of the company by JPMorgan Chase on March 16th, guaranteeing $29 billion toward the cause.)
Today, Gamespot News reports that Take-Two’s Shareholder Advisory board has released a sort of “top ten” list detailing why the EA buyout is bad business. Most of what’s expressed is old news; their belief is that EA is timing the buyout to capitalize on the upcoming release of Grand Theft Auto IV, even going so far as to call the offer “opportunistic.”
Interally, Take-Two took sought further protections. Today, the company adopted what’s called a “poison pill” agreement, allowing new shares to be created if any single shareholder acquired 20 percent or more of the company in the next 6 months. A stockholder rights agreement was also ratified and Take-Two’s annual meeting was also moved to mid-April. Other options are also being considered, including partnerships with third-parties. EA could be one of those third parties.
Commenting on today’s moves, Take-Two’s chairman of the board Strauss Zelnick told Gamespot:
We are effectively working toward a process to review all available options to maximize this value, either as an independent company or in combination with a third party, and are open to beginning informal discussions starting now. Our stockholders’ interests would hardly be served by accepting an offer from EA at the wrong price and the wrong time.
Take-Two stock closed up a third of a percent today, to $25.91, inching closer to its 52 week high of $27.61.
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