Industry rumours are building that Viacom has launched an official bid to seize control of Take Two Interactive.
The entertainment giant headed by Sumner Redstone is owner of MTV, Nickelodeon, Paramount Pictures and Dreamworks Studios. Annual group revenues are over $11 billion.
MCV understands that Viacom has made an offer of $23 a share for the games company behind blockbusters such as Grand Theft Auto and Bioshock. Last night Take Two shares were trading at just under $16, but mid-term ratings have been increasing for the stock since it was confirmed that GTA IV would be released at the end of April.
If Viacom is genuinely willing to offer a 30 per cent premium on the current stock value, this is not massively out of line with recent share price targets set by analysts such as Brent Thrill at Citigroup.
Whilst the company's current market cap is $1.16 billion, the Viacom interest could mean an offer for the company worth $1.5 billion. Major shareholders such as OppenheimerFunds, SAC Capital Management and Tudor Investment are known to be keen on selling their stakes should a good valuation emerge.
Now could be the perfect time for a predatory move, before the inevitable success of GTA IV returns some gloss to a company that has struggled for the past couple of years. Relations between the two organisations are also strong, with Take Two holding game rights to many Nickelodeon and MTV properties.
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Indeed, last summer Viacom appointed former Take Two Germany boss Arwed-Ralf Grenzbach as VP of games for Nickelodeon and Viacom Consumer Products. Following the Vivendi takeover of Activision in December, similar swoops for games companies have been expected - as the big names from traditional entertainment sectors such as movies and TV look to get in on an upwardly mobile and highly profitable business.
Sumner Redstone, Viacom's executive chairman, also retains a personal stake in fellow US games publisher Midway.
Comments
Yep
The MTV and Rockstar brands seem ideally suited to one another
No.
Control over Take-Two, and therefore its wholly-owned subsidiary Rockstar Games, is not a good thing at all!
Re: No.
Is that meant to be $23 per share rather than £23?
Re: No.
I don't pretend to fully understand the ins and outs of the arrangement, but I was always under the impression that Rockstar games have a contract with Take Two until Feb 2009, after which they would be able to breakaway from Take Two.
Not sure how this would be factored into any take over. Thats why I have never thought a takeover of Take Two would be as lucrative as it first appears (and maybe why EA haven't beaten Viacom to such a takeover) - not to forget all the other internal problems being experienced at Take 2 in recent times.
Inevitable
Firstly there are massive economies of scale in publishing. So it pays to be big.
Secondly the handful of massive global media companies are desperate to ramp up their gaming presence because gaming is still at it's beginnings. It will grow to be bigger than film or television.
Viacom are already investing $500 million into gaming via it's MTV brand and Sumner Redstone, who is the majority owner of Viacom, is also the majority owner of Midway games. Viacom also own Xfire, Harmonix, Game Trailers and Neopets. So Take Two would be joining Sumner Redstone's portfolio of game investments.
Re: Inevitable
Yep - sorry all.
Typo error meant our story said £23 briefly yesterday. Rumoured bid price is $23 (dollars), which is a 30 per cent hike on Tuesday's $16 price at close and in line with most anaysts' mid-term value target for the stock.
Re: Inevitable
Haven't you seen the reaction to your story? It was wrong.
http://news.yahoo.com/s/nm/20080207/tc_nm/taketwo_viacom_dc
Re: Inevitable
okay :) this url won't break:
http://tinyurl.com/372gye
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