After eight months of relentless pursuit, California-based publisher and developer Electronic Arts (EA) says it is no longer pursuing the hostile takeover of Take Two Interactive, which rejected the unsolicited $2-billion offer as being inadequate.
The much-discussed merger of two of the biggest names in the video game business would have created the largest game company in the world, surpassing Activision Blizzard, the creation of which surpassed EA as the largest company.
After a friendly buyout proposal was rejected, Electronic Arts turned to hostile exercises in its bid to acquire the 'Grand Theft Auto' publisher.
For six months till August this year it was relentless in pursuing the takeover which was rejected by Take Two's board on numerous occasions. In August Electronic Arts' came to the negotiating table and signed a non-disclosure agreement with Take-Two after letting a deadline for a 2-billion- U.S. dollar tender offer to buy the company stock at a price of 25.74 dollars per share, expire.
The US Federal Trade Commission last month ended its review of a potential tie-up between EA and Take-Two, clearing away a regulatory hurdle to such a deal.
Electronic Arts had offered $26 a share which represented a 64 per cent premium over Take-Two's stock price when the bid was made public in February but it rejected the proposal saying it had undervalued its business but said it was still open to discussing a potential deal.
EA later lowered its bid price further to $25.74, after Take-Two implemented a management compensation plan that EA claimed lowered the value of the company.
Take-Two has said that the $2 billion price undervalued its shares and long-term potential and chairman of Take-Two said on Sunday ''What was presented to shareholders was not acceptable.''
In a statement released on Sunday, Take-Two said it remains focused on creating value for its shareholders and said that it is still open to talking with other potential buyers.
Meanwhile, EA said in a statement while it "continues to have a high regard" for Take-Two, it decided to terminate takeover discussions after a review of a management presentation from its rival and other due diligence.
''After careful consideration, including a management presentation and review of other due diligence materials provided by Take-Two Interactive Software, EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two.''
EA, the world's largest video game maker, had been trying to get its hands on Take Two's most popular computer game, 'Grand Theft Auto', which has sold more than 10 million copies, but which is also the most controversial, because of its violent nature in which players score points with acts such as carjacking and killing prostitutes or police officers.
Electronic Arts develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, cellular handsets and the Internet under four brand names: EA SPORTS, EA, EA SPORTS Freestyle and POGO.
In fiscal 2008, EA posted net revenue of $3.67 billion and had 27 titles that sold more than one million copies.
Headquartered in New York City, Take-Two Interactive Software is a global developer, marketer, distributor and publisher of interactive entertainment and the company was raking in money, thanks to a blockbuster launch of Grand Theft Auto IV in April.