Michael Pachter foresees EA’s agressive takeover of Take-Two
Reacting to recent industry news, Wedbush Morgan Securities analyst Michael Pachter has predicted that EA will be, in Gamespot’s words, conducting a hostile takeover of Take-Two Interactive. An interesting theory that Pachter also brought up is that EA is more interested in the sports division of the company rather than its other IPs. For more on this, head on over to the full article.
Video game publisher and developer Electronic Arts has offered US$ 2 billion for Take-Two Interactive. Strauss Zelnick, the chairman of the said company, along with the rest of the board has politely declined this offer. At this point, everyone is holding their breath to see what happens next.
Well, almost everyone. Reacting to the recent news, Wedbush Morgan Securities analyst Michael Pachter has predicted that, in Gamespot’s words, EA will be conducting a “hostile” takeover of the company. He pointed out that Take-Two will be joining the EA family one way or another:
By going public, EA is telling you, ‘This deal is happening.’ The only way you can credibly reject the deal is if there’s a better one behind it. I don’t see how anyone can afford to pay this much or more for the stock.
An interesting theory that Pachter also brought up is that EA is more interested in the sports division of the company rather than its other IPs. He noted that if the company could eliminate 2K Sports which is EA Sports‘ primary competitor in the market the US$ 2 billion investment made will be well worth it. Here’s what he had to say:
There’s only one company that can make sense out of an acquisition of Take-Two, and that’s EA. For anyone else to buy Take-Two, they’d have to decide either to bloody themselves competing in sports against EA, or shut down the sports business and give up. Either way, there aren’t many people who are going to pay a premium for the right to engage with EA or shut down that business.
So there you have it from the analyst’s perspective. While Pachter does make a lot of valid points, the fact of the matter is we’re all in the dark on what’s happening between both companies.
It makes one wonder though if Take-Two Interactive will fold or keep fighting. But whatever the case, if this proves true, you can be sure the impact would be felt across the industry – especially since EA publishes across all major platforms, whether console or handheld.