US antitrust oks potential EA and Take-Two merger

21 August 2008 11:54 GMT / By Verity Burns

Letters from the Federal Trade Commission suggest that US antitrust authorities would give the go ahead on a merging of Electronic Arts with rival game publisher Take-Two.

Earlier this week, EA confirmed it would now allow its hostile $2 billion bid for its rival expire and instead approach the company in private talks.

GTA IV publishers Take-Two has always been firmly against the merger, saying that EA was undervaluing the company with its offer and strongly advising its shareholders not to tender their shares. At most, only around 15% ever did, meaning the bid was never successful.

The FTC stated in separate letters to each company that it has carried out an investigation of a merger of the two.

"Upon further review of this matter, it now appears that no additional action by the commission is warranted at this time. Accordingly, the investigation has been closed", the letters concluded.

Shares of both companies were up at the time of writing, with EA 2.3% higher at $47.48, while Take-Two's stock rose 4% to $23.99. This is quite a jump from the $17 a share Take-Two stood at in February, just before EA made its first bid for the company.

With share prices rising in such a manner, it seems Take-Two did the right thing by rejecting the offer of $25.74 back in April.

EA has now said that its chief executive, John Riccitiello, and Take-Two Executive Chairman Strauss Zelnick have held talks about the future, and Take-Two's management has agreed to present its 3-year product pipeline and financial forecasts to EA.

Full tags

Biz, Gaming, OtherConsoles, EA, Take-Two