Filed under: Deals, Industry, Electronic Arts (ERTS)
Take-Two Interactive (NASDAQ:TTWO) has launched its important new “Grand Theft Auto IV” franchise and it’s has done remarkably well. It did not cause a large bump in the firm’s stock which has only moved from $26.62 three weeks ago to $27.10.
The company’s one suitor, Electronic Arts (NASDAQ:ERTS), had already taken the shares up from from under $18 with its buyout offer. Most analysts believe that the offer will be extended because Take-Two has resisted a buyout
According to The Wall Street Journal, that there is a “belief among Take-Two management and some of the company’s shareholders that the company deserves a higher offer from EA. “
No matter what Take-Two believes, EA’s ideal move now is probably not to extend the offer, but, instead, to walk away. The Take-Two share price would be very likely to move back below $20, which would pressure the company’s board to do something to move the share price back up again.
EA’s shareholders are ill-served if the company extends its offer. Without a buyer, Take-Two might have to come to the negotiating table and Electronic Arts could get a better deal.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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