Similar to Microsoft's fight to take over Yahoo, US video game giant Electronic Arts' bid for a rival company has gone hostile, as it launched a tender offer directly to the company's shareholders after being rejected by its management.
The Silicon Valley-based Electronic Arts (EA) issued a statement yesterday, saying that it has commenced a tender offer worth US$26 per share for Take-Two Interactive Software, which publishes the controversial and popular "Grand Theft Auto" game series.
"We believe Take-Two investors will see our tender offer as the best way to maximize the value of their investment in Take-Two," said John Riccitiello, EA's chief executive, in the statement.
EA's new offer matches one made earlier to the management of the New York company, which rejected the 2-billion-dollar bid by saying it was "significantly undervaluing" the company's business.
It was reported that EA began approaching Take-Two management about a potential merger last month, and made its takeover plan public after its offer was rejected.
Meanwhile, Take-Two issued a statement yesterday asking its shareholders not to take action on the EA offer until its board of directors reviews the deal.
But some of the company's shareholders have since been busy arguing for the takeover proposal. Two of its largest shareholders earlier this week said that sold off large portions of their stakes, while another shareholder has sued Take-Two over its refusal to negotiate with EA.
EA said its new offer would expire soon, and industry analysts believe the tender offer is likely to succeed as Take-Two shareholders consider and weigh the risk of EA walking away from the proposal.
Take-Two earlier has said it could discuss with EA about a possible merger only after its new "Grand Theft Auto" game is launched.
The newest edition of "Grand Theft Auto", a series that has sold more than 60 million copies around the world, is scheduled to release in April and expected to become another bestseller.
EA's effort to take over Take-Two has been seen as a step to maintain its industry clout in the wake of the merger of US video-game powerhouse Activision and the video game division of French entertainment conglomerate Vivendi, whose revenue from the combined operations could rival EA's.