Electronic Arts extends offer for Take-Two; Microsoft keeps after Yahoo!; BCE banks try to rework deal

By Aaron Hochman-Zimmerman

New York, May 19 - Microsoft Corp.'s shares were lower as the software giant tried a different approach, this time suggesting a non-merger agreement with Yahoo! Inc. Yahoo, in return, continued to toe the same line of maximizing shareholder value.

Elsewhere, shares of software producer Electronic Arts Inc. slipped as it gave one more month to Take-Two Interactive Software Inc. to consider its $25.74 per share offer.

Share of BCE Inc. sank as the private equity firms looking to buy the company continued to negotiate with the banks over terms of the debt financing.

In finance, investors kept an eye on slightly improving Sovereign Bancorp Inc. as rumors were stirred of an impending acquisition by Banco Santander SA.

Also, shares of Quest Resource Corp. soared after the company announced it will not continue with its deal to acquire Pinnacle Gas Resources Inc.

Meanwhile in the broader market, the Dow Jones Industrial Average ended better by just 41.36, or 0.32% at 13,028.16, while the Nasdaq Composite Index dipped by 12.76 or 0.50% to finish at 2,516.09.

The S&P 500 inched up by 1.28, or 0.09%, to close at 1,426.63.

Electronic Arts extends offer

In the media world, shares of Take-Two (Nasdaq: TTWO) were lower by $0.19, or 0.70%, to $26.91 after Electronic Arts, as expected, extended its tender offer one month until June 16, according to a press release.

"Extending our offer will allow the FTC [Federal Trade Commission] review process to continue," said Owen Mahoney, senior vice president of Electronic Arts corporate development in the release.

"EA's offer price remains unchanged at $25.74 per share and our offer is still subject to conditions that include regulatory approval ... we retain the right to terminate the offer if the conditions are not satisfied," the release added.

"I think it's reasonable to assume that EA and Take-Two may be having conversations in the near future," said Colin Sebastian, vice president of equity research at Lazard Capital Markets.

"Obviously there is a gap in perceived valuation, so I do not know if any talks should be characterized as formal discussions," he said.

Looking into the future, he added: "We continue to think a deal in the range of the current offer would be positive for shareholders from both companies."

Shares of Electronic Arts (Nasdaq: ERTS) lost $1.17, or 2.36%, to close the session at $48.43.

Microsoft's yen for Yahoo!

Microsoft was back again at Yahoo!'s doorstep asking to come in.

"Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo!," said a Microsoft press release.

Under the latest proposal, Yahoo! would run ads arranged by Microsoft which would, if successful, stand in the way of a deal between Yahoo! and Google Inc.

Of course, "Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties," the release reminded Yahoo!

Yahoo! gave Microsoft the same answer it heard over and over again at the negotiating table: "Yahoo! has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time. Yahoo! and its board of directors continue to consider a number of value-maximizing strategic alternatives for Yahoo!, and we remain open to pursuing any transaction which is in the best interest of our stockholders."

Yahoo! (Nasdaq: YHOO) shares improved by just $0.02, or 0.07%, to $27.68.

Microsoft (Nasdaq: MSFT) shares fell by $0.53, or 1.77%, to $29.46.

Google (Nasdaq: GOOG) shares were off by $2.55, or 0.44%, to end at $577.52.

BCE wins regulatory approval, banks balking

The deal for private equity firms to buy Montreal-based BCE was approved by the Canadian

Radio-television and Telecommunications Commission (CRTC), according to a press release.

Still, the financing banks including Citigroup, Deutsche Bank and RBS were reported to be in talks over the weekend to renegotiate the financing of the $52 billion deal.

Shares of BCE (NYSE: BCE) closed down by $2.19, or 5.64%, at $36.62, but the original deal was for $42.75 per share.

Sandanter stocking Sovereign?

The long history between Banco Santander and Sovereign Bank may soon be over, at least as two separate entities, a market source said.

"With Santander adding [stock], relational and insiders are adding stock," he said.

"Folks are thinking Santander buys the rest of the company shortly," he said.

Santander already helped itself to a $2.4 billion portion of Sovereign in 2005, leaving market watchers to speculate over when its appetite would return for the rest of the Philadelphia-based bank.

But only this past February did Santander's name resurface in connection with a deal to acquire all of the company.

In trading Monday, shares of Sovereign (NYSE: SOV) crept up by $0.04, or 0.50%, to $8.11.

Shares of Santander (NYSE: STD) slipped by $0.30, or 1.35%, to finish the day at $21.91.

Quest for Pinnacle stops short

In energy, shares of Quest (Nasdaq: QRCP) jumped by $1.90, or 21.32%, to $10.81 after it announced it will no longer pursue a merger with Pinnacle Gas.

"We are disappointed that some of the conditions to closing our proposed merger with Pinnacle were not satisfied as of May 16, 2008," said Jerry Cash, chairman, president, and chief executive officer of Quest Resource in a release.

Shares of Pinnacle (Nasdaq: PINN) tumbled by $1.19, or 29.68%, to $2.82.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.