EA secures $1 billion loan commitment

The megapublisher confirms that it can get its mitts on some spare change to ensure it can afford Take-Two.

Back in February, shock news hit that Electronic Arts had made an offer to buy Rockstar Games parent company Take-Two Interactive. Take-Two executives refused an initial private offer of $25 a share, saying that the price wasn't right. Analysts made it known that they didn't think it was either--but not for the same reason--believing the offer overvalued the firm. When EA went public with its $26 a share offer, Take-Two still refused to consummate the deal.

Since then there have been numerous twists and turns in the saga, including shareholder unrest, Take-Two executives instituting a poison-pill takeover defence plan, and a lawsuit.

After confirming that it was prepared to go for a hostile takeover, in April EA extended the deadline of its offer to May 16, but also lowered the bid to $25.74 a share. Take-Two then reiterated that the deal was "the wrong price at the wrong time."

Today, four days before the latest deadline, Electronic Arts published an SEC filing revealing it has now secured a commitment for an extra $1 billion toward the buyout from a consortium of investors including Morgan Stanley and the Bank of Nova Scotia. Along with the $2.3 billion in ready cash that it reckons it can lay its hands on, the grand total comes to $3.3 billion.

The loan can be requested at any time up until January 9, 2009, and must be paid back before August 9, 2009.

EA has made no secret of the fact that Rockstar, which recently released the record-breaking Grand Theft Auto IV, was the jewel in the crown of the deal. CEO John Riccitiello praised the developers, saying, "I believe the company is fully justified in calling themselves Rockstar because that's what they are in the industry." Today, in an interview with The Wall Street Journal, Rockstar president Sam Houser returned the compliment. He called Riccitiello "the real deal," but added that a takeover wouldn't mean he would be looking for EA's approval on content.

166 Comments

  • VegetaMaelstrom

    Posted May 13, 2008 6:21 pm PT

    Can anyone say with a straight face that if EA absorbs Rockstar they won't absolutely plaster ingame advertising and jarring product placement in every single corner of the game world? Of course they will. EA does that with almost every game it publishes now. In some sports games that can be overlooked to a degree but even then EA does not know when to draw the line such as in the last Knockout Kings game. What the hell do trucks and Burger King pimps have to do with boxing? Nothing. EA has shown time and time again that they will compromise the integrity of any game in order to rake in a bit more advertising money. Part of the charm of GTA games is the freedom the creators have to dream up hilarious companies and scathing ads that poke fun at aspects of society. Would EA really leave Rockstar completely alone to make the kind of game they want to make as many of you on here are suggesting? Would EA truly keep out of the development process except to market, finance and collect the profits? Or would EA force Rockstar to include companies like Burger King, Axe body spray, Dodge trucks, Mountain Dew and so on... in order to make tons of money from the throngs of companies who would like to be included in any future GTA game? No matter how much it cheapened the feel of the game? I think I know the answer and that is why I want the GTA franchise to stay with Take-Two because with them I KNOW that the series is in great hands judging by the past 4 full titles put out. With EA at the helm the series MAY still be great but I have severe doubts that the quality would remain where it currently stands.

  • prioritymail

    Posted May 13, 2008 12:32 pm PT

    Stop it EA, just stop it. Leave these businesses alone

  • Impostorzim

    Posted May 13, 2008 10:31 am PT

    3 more days till the deadline. I wonder what will happen. I'm sure EA will feel kinda bummed about pulling that loan if Take-Two throws the money in their face, haha!

  • Hvac0120

    Posted May 13, 2008 10:10 am PT

    Nobody can predict what will happen. You cannot say that it is fact that GTA will "stink" in the future if EA takes over Take-Two. There is a higher likely-hood that one of those things will happen, but none of it is guaranteed. You can probably expect certain IP's to go downhill and some to disappear. GTA will most definitely not be one of those IP's. Until you get some genuine feedback from both EA and Rockstar, there is no way to predict how this will play out. And neither of these parties are going to risk anything by making announcements to the public.

    Some people just need to chill out. I have a problem with EA published games too, but some of these remarks are unbelievable paranoid rants.

  • Nineball2112

    Posted May 13, 2008 9:04 am PT

    "So yes, EA bashing is completely justifiable & comprehensible simply because in the long term, the Take-Two legacy will dissolve & whatever GTA game is made in the future will stink. So why ruin a good thing by owning it?"

    And you know this how? Time travel into the future? Reading of tea leaves? Indian shaman told you?

    Get a grip.

  • jknight5422

    Posted May 13, 2008 8:38 am PT

    I don't want EA to touch Take-Two. What usually happens with acquisitions is the large company fries some element of the acquired company..ensuring that game quality will stink in the future. It's also completely possible that the geniuses behind the GTA games will simply retire from the gaming industry or quit to go build a new startup game company. This always happens. So yes, EA bashing is completely justifiable & comprehensible simply because in the long term, the Take-Two legacy will dissolve & whatever GTA game is made in the future will stink. So why ruin a good thing by owning it?

  • Hvac0120

    Posted May 13, 2008 8:37 am PT

    I really hope Houser's attitude can carry on without issues from the big-wigs at EA. Really, I don't think EA will do much to the operations at Rockstar. EA knows that the developer has continued to make hit after hit, even with it's lesser games (Manhunt, Table Tennis). I think that they will let Rockstar continue as normal so that they can reap the benefits of Rockstar's future successes.

  • Nineball2112

    Posted May 13, 2008 8:27 am PT

    The mindless EA bashing is inconprehensible. I mean... seriously. WTF?

    I didn't care one way or the other, but based on the mindless "EA is the devil... EA suxors... EA just go away" drivel on every one of these threads about EA.... well, all I can say is GO EA! WooHoo!

  • godzillavskong

    Posted May 13, 2008 6:29 am PT

    I could care less. As long as EA doesn't can them like they did the staff @ EA Chicago(makers of Fight Night Round 3). If most of the staff from Take-Two is still on board when EA buys them, then they should be able to put out the great games that were used to. I actually like a lot of the games that EA puts out, but no one wants to see a big company buy out all the smaller ones.Peter Moore said it in one of my gaming mags, he said that his biggest problem is with the size of EA and how its tough to control quality at that huge level of operations.

  • USSpurs

    Posted May 13, 2008 5:50 am PT

    I can see it now....EA Presents Need for Speed GTA Edition....GTAIV Street....GTAIV Crime Boss Manager Mode.......GTAIV San Andreas versus Liberty City.....EA Super Bowl Madden Spectacular in Liberty City 09.....Harry Potter visits Liberty City......Medal of Honer GTAIV.....oh God help us - we are all doomed

  • imprezawrx500

    Posted May 13, 2008 3:48 am PT

    what is so bad about ea? activison is just as bad at buying out companies but no one hates them in the same way ea is hated. and ea makes some great games. c&c 3 is great as is burnout, moha has some pretty innovative features with its open level design, look what happen when ubi tried to take on nfs. it failed big time, nfs in general is a great arcade racer. Ea is no worse than any of the other big companies and ubi is far better at putting out crappy games. ubi is fully of junk but then they have some really good game so no one hates them for some reason, while ea has just as many great games, just they have more junk as well

  • iceyintel

    Posted May 12, 2008 10:15 pm PT

    Come on Take-2 stay in there!!!I am soo (beep) mad at EA right now, for how they managed Sim City Societies,with their horrible marketing plan, and the way they screwed tilted mill, tilted mill's effort is what held the game together, while greedy EA does the stupidest marketing moves, and they make sure they arn 't the one to blame, and dump all their problems on tilted mill.How much credit does tilted mill get? Like jack (beep), no logo in-game,no logo on the cover of the box, the ONLY time the mention tilted mill is on the back of the box in tiny font that says "Tilted Mill Entertainment inc." See what i mean, EA does not treat small developer companies fairly.While, Sierra Entertainment was nice enough to let Tilted mill have a logo on the cover, let their forum be the official, and have a logo in-game with Caesar 4.

    EA go to hell.

  • JGoWild

    Posted May 12, 2008 9:55 pm PT

    I've already had enough of this, and now this.....OK...here are my three simple questions to all the gaming companies...
    1. Who do you sell your products to?
    =we the consumers, so, you have to think about us before you do about yourselves.
    2. Do you know what happens if you eat too much burgers?
    =you puke.
    3. Have you guys gone out of your minds?
    =Why do I have a feeling that the answer is yes.

    Conclusion: Gaming companies have started to becoming corporate puppets.......

  • jdiego82

    Posted May 12, 2008 9:27 pm PT

    EA sucks...

  • education

    Posted May 12, 2008 9:26 pm PT

    well at least we can now look forward to a GTA every year. Therell be a GTA 09 out this fall !

  • ps3thabest

    Posted May 12, 2008 7:50 pm PT

    im sick of ea and their horrible games

  • Pie_FOREVER

    Posted May 12, 2008 7:49 pm PT

    I guess this is all that matters anymore. Be a huge conglomerate and buy out any threat to you, aquire it and run it into the ground like your other aquired entities.

    EA + Microsoft = End of innovation in the gaming world

  • TheBlackHughHef

    Posted May 12, 2008 7:28 pm PT

    If this happens, I am boycotting all EA sports games. They did me wrong on the NFL 2K series, but i be damned if i lose the greastest b-ball game NBA 2K.

  • valdarez

    Posted May 12, 2008 6:58 pm PT

    EA is a horrible company. They care nothing about games, or about gamers. They mass produce junk, then use the profits to buy out good companies, and then turn them to mass producing junk. If you are a fan of gaming, DO NOT BUY EA GAMES! If you must play an EA guy, then rent it or buy it used. There are enough games on the market now though, that it's easy to pass up EA's games and not miss a thing. This is the most hostile take over EVER in gaming industry and it's not being done by a company that cares about the consumer (the gamer!). EA is horrible, horrible, and more horrible.

  • Suuji

    Posted May 12, 2008 6:02 pm PT

    EA should use that money to make better games, not for buyouts.

  • chibi-acer posted May 12, 2008 5:56 pm PT (does not meet display criteria. login to show)

    chibi-acer

    Posted May 12, 2008 5:56 pm PT (hide)

    Nice, do it EA. EA has been really turning themselves around lately with new management in different divisions, and they've done a lot to learn from their mistakes. In contrast, Take-Two has horrible management and does little for their developers.

  • fluffebunnie

    Posted May 12, 2008 5:14 pm PT

    "EA makes crappy games, has a track record for running IP's into the ground for every single dollar, and is obviously attempting to hold its crown as king of gaming-industry."

    Back in the day these companies had the gamers' best interests at heart. I mean after all, they are the customers. However, now this isn't the case and the more EA gobbles up the more gaming as a whole suffers.

  • fluffebunnie

    Posted May 12, 2008 5:12 pm PT

    Ah, EA wants another popular name to slap some poorly implemented in-game advertising on and disgrace gaming further. Screw you EA. I would definitely not buy any of Rockstar's current series if EA took them over.

  • jansong1

    Posted May 12, 2008 4:35 pm PT

    Seems to me EA is gathering enough companies to justify putting out a console of their own. Hmm...

  • Proman84

    Posted May 12, 2008 4:26 pm PT

    Take Two doesn't need this. And, ironically EA doesn't need this either.

  • Soupflakez

    Posted May 12, 2008 4:15 pm PT

    shadystxxx:

    This matters to those of us that can see past petty excuses like what you're trying to say. Monopolies are always bad, no matter what they're involved in. And guess what? EA is making great strides toward becoming one. 2K.....Activision...Ubisoft.....and others like Sony and Nintendo are the only mega-publishers/developers left really. If EA starts to cannibalize other mega-publishers...then guess what...quality goes down for profits. It may not mess with the current IP's like Mass Effect or Rock Band, but the chance of another great original game coming into being is greatly reduced due to whoring out IP's and driving them into the ground. And, incase you haven't noticed, most IP's coming straight out of EA themselves are crap. Army of Two is just an example. Maybe people wouldn't be so upset if EA would just let it be. 2k obviously isn't going to sell out, especially with a buge business opporitunity like GTAIV and future GTA's.

    I hope I'm wrong, but, personally, with EA's track record, I'm fully against this 'hostile' take-over bid. EA makes crappy games, has a track record for running IP's into the ground for every single dollar, and is obviously attempting to hold its crown as king of gaming-industry.

  • LostSoulDX

    Posted May 12, 2008 3:14 pm PT

    I don't know if this will happen, actually. There's one thing that seems to have been forgotten: Take Two owns 2K Games. If EA does a takeover, they would have a monopoly on sports games. Last I heard that was being investigated by the FTC, who could step in and stop the takeover from happening if they come to the conclusion this is a monopoly.

  • jay_rock_

    Posted May 12, 2008 3:12 pm PT

    Oh well lets see what happen...

  • goldeneye_basic

    Posted May 12, 2008 3:08 pm PT

    To everybody that thinks it is a good thing if EA acquiresTake-Two: When 2K Sports was producing better NFL games than EA, EA reduced competition by acquiring the exclusive rights to produce NFL games instead of stepping up its efforts to produce a better game. Now, the only choice for NFL games are the Madden games. 2K responded by acquiring exclusive rights to make MLB games, which I'm sure pissed off EA. If EA buys Take-Two, it wouldn't need any exclusive rights to either of those leagues anymore because there aren't any other developers that currently make sports games as good as those studios. Your choices would be reduced to buying only EA sports games. What do you think the quality of the Madden games will be like if EA buys Take-Two and drops its licensing deal with the NFL because it wouldn't need it anymore? It is a fact there will be less choice for sports video games if EA buys Take-Two. Also, let's not forget all of the crappy James Bond games EA produced after outbidding RARE for the rights, which is why I don't like EA. Take-Two had absolutely no problem making games such as Bioshock and GTA4 with out EA's money, so it's not necessarily in dire straits. Without EA, Take-Two will do just fine. This acquisition will mean less competition, which is bad for gamers.

  • CloudStrife9288

    Posted May 12, 2008 3:04 pm PT

    it looks like good money, but you guys don't know how financially set take-two is or what they are worth, so why are people saying that they should take the deal??

  • Pure_LionHeart

    Posted May 12, 2008 2:54 pm PT

    Bank Of Nova Scotia!? My home Province is helping with this takeover? Dammit.

  • okassar

    Posted May 12, 2008 2:49 pm PT

    Whoa guys,yes this might be bad for us(and I say might because EA wouldn't buy Take-Two for Rockstar if Rockstar would make crappier games or if EA would then take over the games.No,Rockstar still makes games like GTA,only with some guidelines from EA),but why the hell would anybody think that EA would consider backing out because people think it will ruin some good games.Hell no,this world is driven on money,this would be a good deal in terms of cash for both sides,and if you're working in either company,maybe you care about the quality of the games just for the hell of it,but you're working for money,and that is what this deal and all other buyouts are about-MONEY.The deal will happen if both sides find this profitable according to the offer of EA and the demand of Take-Two.I wouldn't say it is irrelevant but come on,don't shallowly say "EA come on make your own good games and stop buying other companies",wtf?They're looking for money,they don't care about what anyone else has to say,especially crap like that.

  • gdogghenrikson

    Posted May 12, 2008 2:47 pm PT

    I hope there loan backfires on them

  • Flat_Line_____

    Posted May 12, 2008 2:33 pm PT

    Shadystxxx knows what he is talking about guys, don't let ignorant misguided people influence your opinion based on what they themselves have been told to hate. I just had to say somethin cause he is about the only one in here using his head and speaking truth and logic and he is getting all negative marks...... sad.

  • Autolycus

    Posted May 12, 2008 2:23 pm PT

    remember, the general census here in the u.s. is big business is evil. While all these people are barely making it buy, the owners and people high up are sitting on lump and lumps of mililons of dollars worth of profits that do nothing but sit in a bank, while other people are wondering if they can get to work next week because their SUV costs so much (thats what you get for not purchasing a VW Diesel)

  • bioghost

    Posted May 12, 2008 2:22 pm PT

    I hate EA taking charge of the gaming companies
    just stick to your own and create good games

  • Autolycus

    Posted May 12, 2008 2:20 pm PT

    say good bye to T2, EA will kill it and everything nice about them, including GTA. Expect ads for power-ad (get it?), nike, etc to be all over the place. Also expect a sequal every year with nothing really new in it.

  • Kravyn81

    Posted May 12, 2008 2:19 pm PT

    They just don't know when to quit, do they?

  • _Elite_Bushido_

    Posted May 12, 2008 2:14 pm PT

    i hate EA to death and everything but i mean DAMN, now THATS a loan, lol

  • GrgSpunk

    Posted May 12, 2008 2:06 pm PT

    Where the hell is the Federal Trade Commission?

  • NecroCharm

    Posted May 12, 2008 2:05 pm PT

    Has EA paid people to praise them on here? Seems like a lot of pro-EA people, more than normal.

  • Sheps21

    Posted May 12, 2008 1:59 pm PT

    yeah, EA wouldn't dare messing with the formula that almost doubled the record for first day sales.

  • shadystxxx

    Posted May 12, 2008 1:55 pm PT

    Also people are saying that future GTA will be ruined because of this take over.
    Really its not going to affect a thing, rockstar will still make there gta's anyway they like.

    Bioware employee's have said they are given allot of freedom from EA and allot of support they never had before.

    I just dont understand why people think EA are going to kill off these great developers, I would bet my car that games from bioware/pandemic/rockstar/2k boston would be just as good as they have always been under the EA logo.

    Im sure EA will make crappy spin off's of mass effect ETC of wii/ds/ps2/psp etc etc but who cares you dont have to buy them we will still get the proper games developed by bioware for 360/ps3/pc so really it doesnt bother me one bit as i doubt it will affect me as a gamer.

    People are acting like these franchises would die after ea bought them up.

  • skyline7284

    Posted May 12, 2008 1:51 pm PT

    @tatu2004 Dude get over yourself, its not like the world is ending....

    Besides not to praise EA or anything but they have actually listened to people latley, with the whole Battlefield thing, aswell as the SecuRom thing that got people so angry

  • p0rkp1e74

    Posted May 12, 2008 1:46 pm PT

    well at least we got greatness before it is is consumed by the all-consuming mega publisher.....GTA 4 rocks and will continue to do so for a long time to come and with DLC planned hopefully not being affected by EA and there Takeover.

  • shadystxxx

    Posted May 12, 2008 1:46 pm PT

    Merl57

    N O N O NO! I am sick of this EA you are way WAY out of control and we need some government intervention, seriously, they are taking everything over just because its going to earn them more money, thats their only motivation Greed
    ---------------------------------------------------------------------------------------------
    Every company in gaming are in it for one reason, TO MAKE MONEY.

    Gamespot is part of cnet, they run this website to make money, NOT BECAUSE THEY LOVE YOU OR GAMES.
    The people that do run probably love gaming but the people who own it are more bothered about profits, as its a buisness, thats what buisness is about to make money.

    Every publisher is in the buisness of making money.

  • khai411

    Posted May 12, 2008 1:40 pm PT

    T2 released a GTA every year yes.. but most of the time it was a different version for a different console, or a port to a different console.

    That can't cannot compare to EAs release of its' games for DS, wii, PSP, PS2,PS3, XBOX360, PC.. all every year.

  • shadystxxx

    Posted May 12, 2008 1:38 pm PT

    I doubt EA buying T-2 would mean anything to us as gamer's, although i know allot of gamer's think EA is the devil of gaming(i think they just hate EA because it's cool, like hating music because its mainstream).

    T-2 are a similar company to EA, they have several great studios and put out some great game but they also put out some trash just like ea.

    I hear allot of people saying they would never buy an ea game again after they bought bioware/pandemic but thats just bullpoo.

    EA still have some great developers that make games like:
    Burnout
    Fifa(great IMO, im english)
    Madden(americans seem to like it, its a best seller every year)
    crysis
    fight night
    battlefield
    tiger woods
    C & C
    Def jam(there been 1-2 good games)
    the godfather was a good game
    medal of honor
    need for speed
    road rash
    desert strike
    lotus turbo cha 2(well i liked that for the amiga back in 91)
    sims
    sim city
    skate

    Im sure there's others buts thats all i can think of off the top of my head, and im sure nearly every gamer has enjoyed one of these franchises over the years.

    Yes i know they have pulled some dodgy tricks like rockbands uk pricing, but allot of other publishers have done similar things, also sony charged £425 for there console in may 07 and less than a year later you can buy it for £299.

    Personally i'd rather rockstar went self owned but i suppose they cannot because of contracts.

    The fact is T-2 are finished so somebody has to buy them and the only companies i can think of that could afford it are EA/microsoft and acti-blizz, and activision is just as bad as EA 2 million tony hawks, 1 cod every year when theres no need, IMO treyarch games are just shooters with the cod name.

    And im sure allot of people dont want MS to buy t-2 as all them franchises would be exclusive games.

    Infact im surprised MS has not been trying, buying t-2 could put them on top of the pile, having GTA as an exclusive game would be a massive blow to sony/nintendo, lets hope that does not happen.

    So all in all what does it matter, EA will buy t-2 and the devs will continue to make there games just like they did for T-2 the only difference we will see is an EA logo on the box instead of a take-two logo, and also 99% of these games will be multi-platform, so ps3 owners will get bioshock.

    I doubt it will affect us gamers in anyway, except there maybe some spin off titles using the GTA name, but that may not be allowed as im sure T-2 would have done it already.

  • pungaboy

    Posted May 12, 2008 1:35 pm PT

    Looks like Game Over for Take Two.

  • RELL1K

    Posted May 12, 2008 1:34 pm PT

    I think the talent at Rockstar might consider jumping ship if Take Two was indeed bought out by EA. After all they would be buying the company not the employees. They would probably form another company under a different publisher like Activision or something.

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