US video game giant Electronic Arts last night said it had made an unsolicited $1.9 billion offer for Grand Theft Autopublisher Take-Two Interactive Software, escalating its battle with Activision for the title of biggest video game maker.
Electronic Arts said it had pursued the deal privately since December, and Take-Two yesterday immediately rejected the offer, a 50 per cent premium to its Friday close, and accused EA of trying to scoop up a company in turnaround with an "inadequate" bid just before the publication of its next hit.
The $26-per-share all-cash bid is Electronic Arts' answer to Activision's $18 billion acquisition of the gaming unit of French media and telecoms giant Vivendi. That combination, announced last November, is set to challenge EA's long-standing industry dominance.
Electronic Arts, publisher of blockbuster games like Maddenand Need for Speed, would become the largest sports game maker by far if it buys Take Two.
The offer follows months of speculation that Take-Two would be acquired by a major games publisher or media firm, with News Corp and Viacom often mentioned as possible suitors as they eye the fast-growing video game industry.
Take-Two said the offer valued it at a "significant discount" to peers. EA's offer would be about 18 times its expected fiscal 2008 earnings, while France's Ubisoft trades at 34 times expected earnings in the year ending March 2009 and Activision, with a similar year, trades at 24 times.
Take-Two Chairman Strauss Zelnick, who helped oust former management last March after it was laid low by accounting scandals and controversy over its games, said he hadn't ruled out a potential deal.
"We didn't slam the door, we just said look, the price is not right and the time is wrong," Mr Zelnick said.