Pachter: EA, Take-Two to close deal before April 10

Will Electronic Arts assume command of Take-Two before Grand Theft Auto 4 (Sony PlayStation 3, Microsoft Xbox 360) comes out? Wedbush Morgan’s Michael Pachter thinks it’s likely. He says that the respective managements of both firms could be close to settling on a price for the merge to take place. Read the full article to get a grip on Pachter’s prediction.

The touted acquisition of publisher Take-Two Interactive by rival Electronic Arts is likely to be completed by April 10 – perhaps earlier – if talks go well between the respective managements of both companies. This is according to Wedbush analyst Michael Pachter.

“We expect that in order to save face, Take-Two management will withdraw its demand that any discussions wait until after the launch of Grand Theft Auto 4 (Sony PlayStation 3, Microsoft Xbox 360), and we think that management will engage in discussions with EA,” says Pachter.

The analyst added that there’s no question investors will jump at the offer if EA raises its bid to purchase Take-Two at somewhere close to US$ 27 per share from its initial proposal of US$ 26 a pop. Pachter believes that EA is likely to be convinced by Take-Two with such a setup.

GTA 4 is set to launch next month and is expected to draw in huge figures. The analyst community says that six million units should fly off shelves in the first week alone, while a total of nine million should cap off the first month.

Pachter says Take-Two should make some US$ 450 million in revenues from GTA 4, which is almost half of the US$ 1.073 billion the company is projected to make by the time fiscal 2008 is done. Total profits should hit the US$ 175 million mark.

However, the success of GTA 4 is not likely to cover the losses of Take-Two as a whole this fiscal cycle. Pachter notes that aside from the next Midnight Club game, the publisher’s lineup looks weak, enough to force the hand of management to go for the EA deal.

Buy: [GTA IV (PS3)]
Buy: [GTA IV (Xbox 360)]

Via GamesIndustry