February 27, 2008
The Take-Two Offer
Electronic Arts has made a hostile bid for Take-Two Interactive. The Take-Two board has decided to take the low road. It immediately awarded the company's managers, who have not done well, generous severance packages contingent on any control change and then rejected the bid calling it "ill-timed and low-priced." Managers also received pay package increases. The managers said the pay increases were not stimulated by the EA offer. Yeah right. The offer is for $26 a share, a healthy premium over the pre-announcement price. The shareholders, and the board, should thank Electronic Arts for the bid, ask for a buck or two more a share, and take the money and run. The irony: The managers and the board are new, representing the new management put in by a group of dissident shares last year because the company was struggling. Apparently was is good for the goose is not good for the gander.
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