Analysts Differ Over Take-Two's Resistance
Electronic Arts' [http://www.take2games.com/] current acquisition offer is leading to radically different predictions from analysts.
Goldman Sachs [http://www.mcvuk.com/news/29993/EA-expected-to-up-Take-Two-bid]analyst Mark Wienkes, speaking just prior to the release of Take-Two's statement reiterating their rejection of EA's initial acquisition effort, said he believes EA will increase its offer beyond the current level of $26 per share. He also strengthened his recommendation of EA shares, based on his belief that their value will continue to rise as a result of "continued industry growth, up to 14 new game titles coming in the summer and fall, and clarity around the Take-Two bid."
Michael Pachter of Wedbush Morgan [http://www.wedbush.com], however, feels Take-Two management has made a mistake with the approach, saying, "We're frankly surprised by Take-Two's rejection of EA's offer. Although many of the points raised by Take-Two's board are entirely true, we are somewhat amused that they are raised as negotiating points."
"We think that the board has virtually no chance of finding a better offer," he continued. "In our view, Take-Two's board has made a mistake. We believe that the company was positioned to extract a higher offer from EA by offering a friendly transaction, and its board chose to continue its adversarial posture."
"We think that Take-Two's position that the company will have greater value after the release of Grand Theft Auto IV [http://www.rockstargames.com/iv] is naive at best, and disingenuous at worst. We think that the strategy adopted by Take-Two's board was ill-advised."
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Electronic Arts' [http://www.take2games.com/] current acquisition offer is leading to radically different predictions from analysts.
Goldman Sachs [http://www.mcvuk.com/news/29993/EA-expected-to-up-Take-Two-bid]analyst Mark Wienkes, speaking just prior to the release of Take-Two's statement reiterating their rejection of EA's initial acquisition effort, said he believes EA will increase its offer beyond the current level of $26 per share. He also strengthened his recommendation of EA shares, based on his belief that their value will continue to rise as a result of "continued industry growth, up to 14 new game titles coming in the summer and fall, and clarity around the Take-Two bid."
Michael Pachter of Wedbush Morgan [http://www.wedbush.com], however, feels Take-Two management has made a mistake with the approach, saying, "We're frankly surprised by Take-Two's rejection of EA's offer. Although many of the points raised by Take-Two's board are entirely true, we are somewhat amused that they are raised as negotiating points."
"We think that the board has virtually no chance of finding a better offer," he continued. "In our view, Take-Two's board has made a mistake. We believe that the company was positioned to extract a higher offer from EA by offering a friendly transaction, and its board chose to continue its adversarial posture."
"We think that Take-Two's position that the company will have greater value after the release of Grand Theft Auto IV [http://www.rockstargames.com/iv] is naive at best, and disingenuous at worst. We think that the strategy adopted by Take-Two's board was ill-advised."
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