Second request from FTC stalls potential merger of Take-Two, Electronic Arts

By Lisa Kerner

Charlotte, N.C., April 17 - Take-Two Interactive Software, Inc. said it received a request for additional information from the Federal Trade Commission in connection with Electronic Arts, Inc.'s unsolicited conditional tender offer for Take-Two.

The "second request" extends the Hart-Scott-Rodino waiting period until 10 days after Electronic Arts and Take-Two have "substantially complied" with the request unless voluntarily terminated or terminated sooner by the FTC, according to a form 8-K filed with the Securities and Exchange Commission.

Take-Two said it also has been contacted by the German Federal Cartel Office regarding competition issues related to Electronic Arts' tender offer. The company will fully cooperate with the German agency, the filing said.

As previously reported, on Feb. 15 Take-Two turned down Electronic Arts' unsolicited proposal, valued at some $2 billion, to acquire the company for $25 per share and said no to the revised $26-per-share offer, calling the latest bid "inadequate in multiple respects."

Take-Two's board of directors recommended that the company's shareholders not tender any of their shares in the offer that ended April 11, believing the offer was "inadequate" and not in shareholders' best interest.

It was previously announced that Take-Two would explore alternatives to maximize shareholder value, which could include a business combination with third parties or with Electronic Arts or continuing as an independent company.

Take-Two had adopted a stockholders rights agreement to protect stockholders against unsolicited attempts to acquire control of the company.

The company's board is prepared to engage in discussions with third parties, including Electronic Arts, following the release of Take-Two's Grand Theft Auto IV video game on April 29, according to an earlier news release.

Electronic Arts, located in Redwood City, Calif., and New York-based Take-Two are interactive entertainment software companies.

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