Take-Two Interactive today held its annual meeting for stockholders to vote on company business and, unsurprisingly, the main topic of the day was the tender offer from Electronic Arts. That offer is set to expire tomorrow, and, also unsurprisingly, Take-Two chairman Strauss Zelnick advised stockholders not to accept.
An associate of GameCyte attended the meeting, which moved quickly and without surprises. Following a brief video presentation of the current Take-Two portfolio, board members moved swiftly through the business, in a bureaucratic manner that ran extremely contrary to their games. Honestly, if there are that many declarations and affidavits and carrying of motions in GTA4, I’m canceling my pre-order.
The meeting began with a positive analysis of Take-Two’s current position in the industry, with highlights focusing on their best successes: Grand Theft Auto IV is, in fact, completely done, is in production now, and will be shipping to stores next week. Retail orders are ahead of expectations. A new Midnight Club is coming in the Fall. Civilization Revolution is coming soon. Bioshock was the highest-rated game of 2007, and a sequel should be expected in 2009. Carnival Games has moved 1.5 million units, and a Carnival-branded golf game should be out in the Fall. All in all, Take-Two has had a nice year for itself, game-wise.
The board then rapidly conducted its administrative business–appointing a new accounting firm, approving a new stock issuance, and so on. From there, Zelnick retook the stand, and laid out Take-Two’s position on the EA offer, which we’ve largely known all along. EA took their offer public on February 24th after Take-Two had rejected it in private. Take-Two offered to open a dialogue with EA on April 30th — after GTA4 launches — but EA instead made their tender offer to stockholders. Zelnick reminded the meeting attendees that this offer was at the “wrong price and wrong time.” Take-Two’s position, he asserted, is very strong, standing on the cusp of potentially the biggest game launch in history, in an industry which is experiencing incredible growth and profit. EA is also undervaluing, said Zelnick, the impressive library of wholly-owned IPs that Take-Two currently has in its arsenal, listing off familiar franchises like Max Payne, Manhunt, and Red Dead Revolver. In addition, Take-Two has just implemented a $25 million cost-reduction plan, and is building operations in Asia.
To sum up, Zelnick said that Take-Two is in the perfect “sweet spot” of growth and profit, with a sturdy lineup of IPs, talented production teams and studios, and a desire to do right by its shareholders.
GameCyte was able to catch up to Zelnick after the meeting concluded, where he answered questions from a few journalists in attendance. When asked what moves he expected EA to make tomorrow, Zelnick said he didn’t want to speculate, but he commented that he’s been “mystified by EA’s approach during this process.” He related that he has a close relationship with many Take-Two shareholders, and while he knows a few of them did ultimately accept EA’s price, he believes the bulk of the shareholders will side with the board to benefit from Take-Two’s impending successes. Zelnick expressed his surprise at his unique position — having been appointed to the board just a year ago in order to turn the company around, he’d expected to be a little further into his two-year plan before having to fend off a hostile takeover.
When questioned about which game he was most excited about this year, Zelnick replied with the old parental standby: “I love all my children.”
Zelnick also mentioned that, since the EA offer, Take-Two has been courted by bids from a number of other interested parties, but just like EA, they would have to wait until April 30th to get into any discussions. Zelnick declined to name any of the other interested parties.
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