EA Sets up Take-Two Financing

SAN FRANCISCO -- Video-games publisher Electronic ArtsERTS is staying strong on its $2 billion for its smaller rival Take-Two InteractiveTTWO, the maker of the blockbuster Grand Theft Auto franchise.

EA said Friday it has secured a commitment from Morgan StanleyMS, BNP Paribas, The Bank of Nova Scotia among others to make available up to $1 billion of loan financing any time until Jan. 9, 2009. The loan will be used to provide a portion of the funds for the merger, said the company in a filing with the Securities and Exchange Commission.

"This is a process point on something we had disclosed earlier when we made the offer," said EA spokesperson Jeff Brown. "It is just financing for the tender offer if we still need it."

EA has offered $25.74 a share for Take-Two, which has rejected the bid as undervaluing the company. After an extension last month, EA's offer is set to expire on May. 16. Most analysts believe the company will extend its deadline.

As of March 31, EA had cash, cash equivalents and short-term investments of approximately $2.3 billion.

Shares of EA closed up 3 cents to $52.61 Friday. Take-Two's stock was up 7 cents to $26.67.

EA will report its fourth-quarter results Tuesday. The company's biggest rival ActivisionATVI saw its shares soar 14.2%, or $3.94 to $31.64 Friday after it blew past analysts' estimates for the previous quarter and offered strong outlook for the current year.