Activision Blizzard No Chance Of Take Two Purchase
July 11th 2008 06:58
Activision Blizzard have been touted as crashing the Electronic Arts party by stepping in and purchasing Take Two. From the original article this rumour sprung from the analysts have already called the police complaining about the noise and asked everyone to go home.
To being with, EA, the largest game company in the world, sports a market capitalization of $14.3 billion; No. 2 Activision's market value is $9.3 billion. EA are easily in the drivers seat. Their interests here are deeper than Activision Blizzards. EA know they would benefit much more by owning the highly regarded sporting titles Take Two have produced.
Activision-Blizzard-Vivendi are already in the midst of a large merger, adding Take Two to the portfolio would be incredibly unlikely and unwise. Ben Schachter, an analyst with UBS Securities LLC, said EA is unlikely to raise its bid in absence of a competing offer for Take-Two. "It is highly unlikely that Activision would try to outbid EA," Schachter added by e-mail. "They have enough on their plate at the moment."
Michael Pachter, an analyst with Wedbush Morgan Securities, said EA remains the favorite to acquire Take-Two "There are only three players involved — EA, the FTC and the arbs," Pachter said. "Is EA likely to withdraw or lower their offer? No, because they want Take-Two. The odds of the FTC not approving the deal on market concentration is virtually zero. And if the arbs want to sell the stock, they'll sell the stock — they don't care what [EA chairman] Strauss Zelnick thinks the stock is worth."
So unless there the world begins to spin in the opposite direction, it is almost a certainty that EA will aquire Take Two.
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