Bizarre love triangle: shareholder sues Take-Two over EA’s buyout offer
It’s double trouble for Take-Two Interactive. As if waiting for Electronic Arts to tighten the noose on their attempts at a takeover wasn’t enough, a disgruntled T2 shareholder bops the company from the inside with a lawsuit. Follow the “read more” link below to find out why.
And it’s a one-two punch. After doing a bit of damage control to reassure its employees after Electronic Arts tried to buy out their company, Take-Two Interactive is slammed with a lawsuit. The funny thing is, it was filed by one of T2’s very own shareholders.
The lawsuit alleges that Take-Two purposely kept EA’s US$ 2 billion buyout offer a secret so that it could enrich its senior executives. Apparently, T2 approved a measure to increase management compensation in case of a takeover just days after the offer.
The compensation approved by the board raised the fees and bonuses that will be received by ZelnickMedia’s management in case the company was sold. From US$ 3.8 million, it was raised to an “exorbitant” (as the lawsuit described it) US$ 16.5 million.
The lawsuit claims that the actions they took to respond to EA’s offer (or as the lawsuit phrases it: “outright rejection of EAÂ’s offers and failure to negotiate”) represents a failure to “reasonably respond” and “maximize shareholder value.”
The lawsuit, filed by Patrick Solomon, specifically calls out Strauss Zelnick and Benjamin Feder, the partners of ZelnickMedia. In response to the lawsuit, the company replied: “We believe that the claims lack merit, and intend to defend vigorously against them.”
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