Filed under: Deals, Electronic Arts (ERTS)

Shares of Take-Two Interactive (NASDAQ: TTWO) are up about 3% this day after the company disclosed that it has entered into a confidentiality agreement with Electronic Arts (NASDAQ: ERTS), in a sign that a deal may get done after all. Last week, Electronic Arts let its tender offer expire but stated that it would listen to a confidential presentation on the company’s operations.

In an 8-K filed with the SEC yesterday, Electronic Arts disclosed the confidentiality agreement and added that its term prohibit the company from commenting publicly on the negotiations until a deal is reached or discussions are terminated.

It’s hard to know what to make of this. By getting Electronic Arts to sign a confidentiality agreement, Take-Two has put an end to the tit-for-tat soap opera aspect of this takeover battle. Whether they’re serious about getting a deal done remains to be seen. Given Take-Two’s track record of filibustering and questionable governance, I’m skeptical. At this point, investors should be evaluating shares of Take-Two Interactive based on its prospects as a stand-alone business, not the chances of a deal that Take-Two’s board has demonstrated a lack of enthusiasm about.

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Filed under: Deals, Merrill Lynch (MER), Lehman Br Holdings (LEH)

Temasek Holdings is one of Singapore’s sovereign wealth funds (SWFs), managing $130 billion. Over the past few years, the fund has been diversifying into emerging markets as well as developed economies.

In fact, Temasek was one of the early investors in some major U.S. financial institutions. It has invested $5 billion in Merrill Lynch (NYSE: MER) back in December.

While Temasek hasn’t tracked well, SWFs focus on the long term. Temasek still appears to be bullish on U.S. financial services companies as the portfolio concentration is a whopping 40%. And there are even rumors that Temasek may invest in Lehman Brothers (NYSE: LEH).

According to its annual report, Tamasek reported a $12.8 billion net profit for the past year as of the end of March. Keep in mind that the fund has engaged in a variety of asset sales.

Going forward, Tamasek is glum on its forecast, though. Basically, the fund thinks that the credit crunch will last another two years - which is certainly depressing.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Deals, India

In India, the growth of the information technology (IT) industry has been stunning. For the most part, the strategy has been to focus on internal growth. However, this may be changing; that is, expect more M&A.

In fact, this week Infosys Technologies Ltd. (NASDAQ: INFY) has agreed to pay $753.1 million for UK rival, Axon Group PLC.

In a way, the Indian IT service providers are victims of their own success. For example, wages are skyrocketing and it’s getting tougher to find quality consultants.

With the Axon deal, Infosys will add about 2,000 consultants who specialize in the complex work of SAP (NYSE: SAP) implementations — projects that can certainly generate juicy fees. Infosys will also get a stronger platform in Europe. Last year, Axon generated $378.3 million in revenues, with $37.4 million in profits.

According to Murray Beach, managing Managing Director of TM Capital:

“This transaction is an impressive step for Infosys. Many of the leading offshore services firms have talked about climbing up the value chain of services offerings and improving on-site customer presence, but none have finished a deal of such magnitude to back up their rhetoric. We expect the acquisition of Axon to mark the first of many acquisitions by the leading Indian offshore players of traditional on-site strategic and technology consulting companies in the US and Europe.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Apple Inc (AAPL), General Motors (GM), Market matters, Coach Inc (COH), Broadcom Corp’A’ (BRCM), Economic data, Marvell Technology Group (MRVL), Rio Tinto plc ADS (RTP), Anadarko Petroleum (APC), Oil, salesforce.com inc (CRM), Delta Air Lines (DAL), Lehman Br Holdings (LEH), Housing

U.S. stock futures were mixed on Tuesday. Following Monday’s broad sell-off and volatile session, which was also marked by low volume, today might not be different — volatile and low volume. Several reports are in focus this day, specifically some housing data that could shine more light on the sector, and consumer confidence, which could also move stocks. Meantime, oil prices declined and the dollar strengthened against major currencies.

Rio Tinto (NYSE: RTP) shares are down over 3% in premarket trading after the mining giant reported fiscal first-half profit more than doubled. RTP’s acquisition of Alcan and soaring commodity prices helped Rio achieve the results. RTP shares have been declining due to worldwide slower growth.

Meanwhile, Anadarko Petroleum (NYSE: APC) shares were 2.4% higher in after-hours after it announced a plan to buy back up to $5 billion of stock.

Staying with share buybacks, Coach (NYSE: COH) are also 1.7% higher in premarket trading after announcing a buyback program of up to $1 billion, which follows the completion of a similar repurchase.

And of course, Lehman Brothers (NYSE: LEH). Shares of the embattled banker are rising this morning following speculation that Kohlberg Kravis Roberts might be interested in buying Neuberger Berman, according to CNBC, while Blackstone Group backed away.

Moving to autos, General Motors Corp (NYSE: GM) has apparently received interest from two separate investors from the Gulf Arab region to purchase its Hummer brand, according to the company’s Middle East chief, reports Reuters. GM shares are 1% higher this morning.

And from autos to airlines, Delta Air Lines (NYSE: DAL) borrowed the $1 billion available on a revolving-credit facility, “which it states will give it flexibility as it closes its Northwest (NYSE: NWA) merger.” Shares of NWA are pushing 2.7% higher in premarket.

To rumor land we go: The blogosphere is circulating a rumor that Apple Inc. (NASDAQ: AAPL) is planning an Apple Event for new iPod nanos, a less high-priced iPod touch, and iTunes 8 on September 9.

Analyst calls:

• Salesforce.com (NYSE: CRM) was upgraded by Citigroup from Hold to Buy and set its target price on the stock to $70.
• Broadcom (NASDAQ: BRCM) was downgraded by Oppenheimer from Outperform to Perform.
• Marvell (NASDAQ: MRVL) was downgraded by Jefferies & Co from Purchase to Hold and lowered the target price from $22 to $15.

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Filed under: Deals, Time Warner (TWX), Sony Corp ADR (SNE), Comcast Cl’A’ (CMCSA)

Famed studio MGM, which is owned by a bunch of companies including Texas Pacific Group, Providence Equity Partner, Sony (NYSE: SNE) and Comcast (NYSE: CMCSA), is considering a public offering as it looks to deal with its $3.1 billion debt load. The company has hired Goldman Sachs (NYSE: GS) to explore options for a way out of the 2005 buyout that left the company over-leveraged.

Studios have slowed production because of the credit crunch that’s making financing films harder than it’s been in a long time.

Other possible alternatives include a bond offering or some other form of debt refinancing, but the company states it’s not for sale, although it remains coy on that topic, saying that that “there is no ‘asking price’ for the company.”

Is that a veiled invitation for bids? Sounds enjoy it. But in this environment, there might not be many takers. Time Warner (NYSE: TWX) made an unsuccessful bid back in 2004, but most the other interested celebrations ended up walking away with various sized stakes in the company.

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