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Take-Two For Sale?

Posted by Aaron on Monday, March 19, 2007

From Next-Generation:

The company postponed its annual meeting scheduled for March 23 to March 29 in order to buy more time to consider the proposed actions of a significant group of shareholders.

A group of major investors accounting for 46 percent of Take-Two shares earlier this month announced plans to attempt to oust Take-Two CEO Paul Eibeler and review CFO Karl Winters’ employment status. The investors planned to nominate six new directors at Take-Two’s next annual meeting.

Take-Two said that the postponement of the annual meeting would allow the company to consider the proposed actions of the shareholder group “and also to evaluate alternative courses of actions that could potentially be presented to the shareholders, including a possible sale of the Company.”

Investors taking part in the move include OppenheimerFunds, S.A.C. Capital Management, Tudor Investment, D.E. Shaw Valence Portfolios and ZelnickMedia.

Although the company mentioned an outright sale is an option being considered, it added that “There is no assurance that any specific alternative proposal will be forthcoming.”

Stocks were up 7.24 percent in midday trading today to $22.36.

Wedbush Morgan Securities analyst Pachter told Next-Gen that Take-Two’s package simply isn’t appealing to buyers. “I don’t think that there are any potential buyers at this price,” he wrote in an e-mail. “The company is just not worth this much. EA already owns 20 percent of Ubisoft, and could buy the rest for $1.7 billion. It doesn’t make sense to pay more to buy [Take-Two], when there is no guarantee that they could keep all of the people, they would have higher guarantees on sports than they care to pay, and they would have a large restructuring burden.”

He added that other companies are unlikely to be tempted to swoop in for Take-Two. “The media companies don’t want the headache of figuring out why Take-Two can’t make any money,” he said.



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