EA Sets up Take-Two Financing

Morgan Stanley leads a $1 billion loan funding.
By Priya Ganapati ,

SAN FRANCISCO -- Video-games publisher

Electronic Arts

(ERTS)

is staying strong on its $2 billion for its smaller rival

Take-Two Interactive

(TTWO) - Get Report

, the maker of the blockbuster

Grand Theft Auto

franchise.

EA said Friday it has secured a commitment from

Morgan Stanley

(MS) - Get Report

,

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

Activision

(ATVI) - Get Report

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.

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