Reuters is reporting that Electronic Arts has secured a billion dollars in loans from Morgan Stanley, among others, in order to finance its ongoing efforts to acquire Take-Two Interactive. EA’s bid, still standing firm at roughly $2 billion, has been on the table for three months now, and has seen increasingly bold tactics on both sides, from EA’s tender offer to Take-Two’s poison pill, while Take-Two’s value continues to hold steady in the wake of Grand Theft Auto IV’s record-shattering release. But does this mean that the buyout is now imminent?
While the sudden influx of capital into EA’s coffers might seem to indicate they’re getting ready to pay for something big, it’s worth noting that the loan does not expire until January, 2009. EA has eight months with which to make use of the loan, and until Take-Two and/or its shareholders decide to negotiate further, the money is simply lying in wait. The news is likely to be the result of EA locking in the necessary funds and credit now, securing their financing in a tough-to-secure market, a financial expert has advised GameCyte.
On the other hand, we’re also advised, there are a few interesting scraps of information to be found in this loan. For one, this act reinforces EA’s commitment to the buyout — both to onlookers, and to potential Take-Two stockholders. An SEC filing from today, reflecting the new loan, has changed a section of the “Questions & Answers” portion of the original buyout proposal. In the filing, the portion which asked, “Will you have the financial resources to pay for the shares?” has been amended to answer “Yes. Our offer is not subject to any financing condition.” In other words, EA is telling stockholders, ”We can pay you right now. Interested?”
And here’s an interesting little nugget: The loan agreement from Morgan Stanley is entitled “Project Braveheart.” Really? Braveheart? Wasn’t he the guy who fought annexation and rule of his property? Maybe I’m remembering wrong. I’m having a hard time seeing Ritticello screaming that nobody will take his freedom.
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