EA extends bid for Take-Two, is rejected again

By Franklin Paul

NEW YORK (Reuters) - Video game publisher Electronic Arts Inc (ERTS.O) on Tuesday again extended its $2 billion takeover offer Take-Two Interactive Software Inc (TTWO.O) but the smaller rival rejected anew the bid as too low.

EA, publisher of blockbuster games such as "Madden" and "Need For Speed," said it extended the $25.74-a-share offer to July 18 from June 16 in order to allow time for the U.S. Federal Trade Commission -- which must approve the pact -- to review the deal.

Take-Two, publisher of titles including "Grand Theft Auto" and "Major League Baseball 2K", said its board continues to recommend that shareholders not tender their shares to EA, which launched its bid in February.

So far, about 6.14 million shares of Take-Two have been tendered in the offer, which Take-Two said represents just 7.9 percent of the total.

Take-Two Chairman Strauss Zelnick said in a statement, "The latest extension of EA's unsolicited, highly conditional tender offer does not alter the fact that their proposal still significantly undervalues Take-Two, a fact that is reflected in the overwhelming number of stockholders who still have not tendered their shares."

Electronics Arts had originally hoped that the deal would be done before the late April launch of "Grant Theft Auto IV," whose sales topped $500 million in its first week.

But Signal Hill Group analyst Todd Greenwald said that if EA succeeds in buying Take-Two, there is still time to reap the financial benefits of the popular video game.

"The key thing for EA is to get it done before the holidays," he said. "Yes, GTA launched on April 29, but the game ... is definitely going to get another big bump come October and November. EA wants to be in place (then) so they get that bump, as opposed to Take-Two."