Electronic Arts Bids for Take-Two Interactive: $2 Billion

Electronic Arts (NSDQ: ERTS) has made a $2 billion cash bid for Take-Two Interactive (NSDQ: TTWO). Take-Two Interactive is best known for games including the popular Grand Theft Auto series and Rockstar Games.

Update: The Take-Two Board of Directors has rejected the offer from EA noting, "inadequate in multiple respects and not in the best interests of Take-Two’s stockholders"

EA CEO John Riccitello has setup a special Web site with information about the bid including a letter to shareholders of Take-Two Interactive. Here are a couple of snippits I found interesting:

In a recent presentation, I told a group of developers that our industry is facing big challenges. Development costs are rising dramatically and games that aren’t big hits struggle to reach profitability. Most independent studios don’t have much margin for error. The result has been consolidation – large publishers are merging and independent developers are more amenable to being acquired. Unfortunately, our industry has a spotty record on integrating creative teams. We’ve all heard the stories about teams that got mismanaged in a merger – I know I’ve got a few.

Right now, Take-Two’s future is uncertain. Take-Two’s creative teams make fantastic games and the company has gotten some good interim support from a group of new corporate leaders. But Take-Two is facing a host of threats and – with or without combination with EA – we believe there is a strong likelihood that the company will be sold in the not-too-distant future.

PaidContent's Rafat Ali has a good overview of the bid and background on the companies.