Take-Two buyout ‘a reasonable bet’

A US analyst has claimed that the commercial success of LA Noire means a possible acquisition of Take-Two is now more likely.

LA Noire now joins Grand Theft Auto and Red Dead Redemption in the publisher’s stable of super triple-A IP. Its catalogue also includes Bioshock, Mafia, Carnival Funfair, Civilization, Top Spin, Midnight Club, its range of 2K Sports franchises and its agreement with kids brand Nickelodeon.

"Whether GTA V is released in late FY12 or a few months later, in early FY13, should not materially change the company’s intrinsic value," Sterne Agee analyst Arvind Bhatia told Industry Gamers.

"Take Two investors know that the risk of game delays and the accompanying earnings volatility is inherent to their investment in this stock. What should be more important is that with the strong launch of LA Noire last week, Take-Two has created yet another valuable franchise.

"We think the company has now made a strong case for generating average annual EPS of $1.00 going forward ($1.35 ex the MLB contract that expires in 2012). With the GTA catalyst still ahead and the possibility of a takeout still a reasonable bet, we are reiterating our $19 price target which is based on our sum-of- the-parts valuation."

In February MCV reported rumours heard from a senior industry source that Activision is considering moving for the GTA publisher. EA mounted a failed takeover bid for the company in 2008.

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