Cone of silence descends over Electronic Arts/Take-Two deal

Electronic Arts and Take-Two Interactive, the maker of the popular Grand Theft Auto video games that EA tried unsuccessfully to buy prior to removing its bid for the company last week, signed a “confidentiality agreement” that prohibits both companies from “publicly disclosing the status or terms of any discussions or negotiations between EA and Take-Two unless EA or Take-Two notifies the other that it is terminating discussions.”

Last week, EA said it would now need to “validate the assumptions” behind its offer to buy Take-Two for $25.74 a share, which expired Aug. 18. Two days later, a review of the proposed deal was closed by the Federal Trade Commission. EA’s desire for a prompt resolution to the deal cooled given that it didn’t feel it now had enough time to “integrate Take-Two ahead of the important holiday season,” according to a letter EA’s Chief Executive John Riccitiello sent to the chairman of Take-Two’s board.

The confidentiality agreement announced today came about as EA agreed to take up an offer to kick the tires and get under the hood of Take-Two’s financials, which presumably Take-Two hopes would result in a better offer.

In the meantime, mum will be the work in light of the confidentiality agreement. “As a result, EA does not intend to make any further announcements regarding the status of any discussions or negotiations with Take-Two unless and until discussions between EA and Take-Two have been terminated or such parties have entered into a transaction. As previously disclosed, EA now requires due diligence to support any proposal to acquire Take-Two and there can be no assurance that any proposal, negotiations or transaction will result.”

 

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