Take-Two saga gains steam
Another potential major proxy fight on our hands? Perhaps.
Take-Two’s chairman Strauss Zelnick proudly declared yesterday, “Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives under way at the company.” $26 per share is not enough. In other words, Strauss must think the entire stock market was munching on mushrooms for the last year to value the stock at less than $20 per share.
That’s all very odd, according to George White at Dealscape. In a great piece on the takeover proposal, he writes:
“In an ironic twist Take-Two’s board, stacked with activist shareholders led by chairman Strauss Zelnick, is turning down the cash. Tired of management shenanigans and a falling stock price, the activists, who now claim the $2 billion bid undervalues the company, won a fight to take control in March 2007. The prior team had put the company on the block last year as it explored a number of options, including finding a buyer. The day before the proxy fight ended, the stock traded at $21.10, valuing the company at $1.8 billion.”
May be it’s not so odd after all. Hank Greenberg on his blog, Marketblog, records Zelnick’s new compensation package, including an “a grant of 600,000 shares of restricted stock that will vest over three years unless the company is acquired, in which case they’ll vest immediately.” Ah, but those shares come with a catch. Greenberg writes:
”The shares won’t vest immediately if, prior to the company’s annual meeting, which is expected to be before April 1, the Company received a bona fide indication of interest in, or offer to enter into, a business combination (which it did); the offer specifies, with some degree of particularity, the material terms (which it may have) and (my favorite) the offer’s existence hasn’t been publicly disclosed or confirmed by either company before Take-Two’s annual meeting. (Oops, definitely happened.)”
Hmmm.
So will we have a proxy fight on our hands? Seth Gilbert at SeekingAlpha sets the table with this post, including financial, product and shareholder analysis. He writes:
“Like Microsoft/Yahoo, the plotline for this deal, and its eventual resolution, could see many shifts and swings. Here, an essential question is whether the same institutional holders (Oppenheimer Funds, SAC Capital Management, Tudor Investments and others) who installed current management just about a year ago will accept 64% as sufficient premium to move on, or will they trust the team they hired to yield a higher return.”
