Analysts disavow comparison of T2-EA merger to Yahoo’s failure

Posted by Dan on September 18, 2008

Gamepolitics reports that analyst Doug Creutz of Cowen and Co. is disavowing comparisons of the Take Two — EA merger failure and this years Microsoft/Yahoo failure. According to Creutz (when asked if they were similar):

I’d say no. YHOO [Yahoo] is clearly a company in decline, with an entrenched management. TTWO [Take-Two] is a company with arguably improving business fundamentals and a management team that I believe was willing to deal at the right price. I also think that MSFT [Microsoft] shareholders were not excited by the prospect of a YHOO acquisition whereas most ERTS [Electronic Arts] shareholders wanted the TTWO deal to happen at a reasonable price.

Creutz also believes that Take Two boss Zelnick is secure in his position:

Any shareholders who wanted to get out of the stock at $26 (EA’s best offer) had ample opportunity. Anyone who was holding out for a higher price feels the same way as Zelnick – no deal at $26. As long as the business turnaround continues then I think Zelnick is safe.

The market might think otherwise. Despite the downturn Take Two’s stock price had held steady until the past couple days, at which point it dropped from the low $20’s per share to about $15 per share. This may be attributable to this weeks bank collapses. EA’s stock has steadily declined from around $49 per share at the beginning of the month to around $43, but has not been hit in the same way over the past two or three days as Take 2 has.

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