EA's Hostile Offer Increases Likelihood of Buyout

Cowen Report, 3/13 - "We believed that EA’s decision to take their offer public on February 24 was driven by their desire to determine the viewpoints of major Take-Two shareholders. After recent major reductions in the holdings of TTWO shares by significant shareholders, it appears unlikely that there will be any meaningful obstacle to the acceptance of EA’s tender offer....If 90% of Take-Two shareholders tender, we think EA could close the deal as early as mid-April via a short-form merger. Otherwise, the deal could take somewhat longer to close, but we do expect a majority of TTWO shareholders to accept EA’s offer."

"We continue to believe that the deal will be meaningfully accretive to EA on both an EPS and EVA basis assuming that EA is able to retain key talent at Rockstar. Although the offer is now technically hostile, we don’t believe this is likely to impact EA’s ability to convince Rockstar’s employees to stay, since EA has made it clear that a significant part of the deal’s value is driven by the development talent at Take-Two."