EA Sets up Take-Two Financing
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
$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
analysts' estimates for the previous quarter and offered strong outlook for the current year.