Bizarre love triangle: shareholder sues Take-Two over EA's buyout offer |
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And it's a one-two punch. After doing a bit of damage control to reassure its employees after Electronic Arts tried to buy out their company, Take-Two Interactive is slammed with a lawsuit. The funny thing is, it was filed by one of T2's very own shareholders.
The lawsuit alleges that Take-Two purposely kept EA's US$ 2 billion buyout offer a secret so that it could enrich its senior executives. Apparently, T2 approved a measure to increase management compensation in case of a takeover just days after the offer.
The compensation approved by the board raised the fees and bonuses that will be received by ZelnickMedia's management in case the company was sold. From US$ 3.8 million, it was raised to an "exorbitant" (as the lawsuit described it) US$ 16.5 million.
The lawsuit claims that the actions they took to respond to EA's offer (or as the lawsuit phrases it: "outright rejection of EAÂ’s offers and failure to negotiate") represents a failure to "reasonably respond" and "maximize shareholder value."
The lawsuit, filed by Patrick Solomon, specifically calls out Strauss Zelnick and Benjamin Feder, the partners of ZelnickMedia. In response to the lawsuit, the company replied: "We believe that the claims lack merit, and intend to defend vigorously against them."
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Comments [refresh]
I told you so...but.
The angle doesn't seem complete though. The issue of secrecy doesn't change anything.
The problem is overall stockholder value because they are issuing options after taking on more inefficient solutions. However, T2 can easily argue that EA's reputation could easily injure their brands and therefore, it is not a viable option. And, I would agree.
What? You mean rich white guys are conducting behind the scenes meetings to fill their pockets with even more millions of dollars?! I'm shocked! Look, I don't want EA to buyout Take-Two anymore than any other self respecting gamer but kudos to this shareholder. The people that just care about getting rich are ruining the game industry and forcing piracy to skyrocket(as reported in another qj.net story) because the price of games has gotten ridiculous. it doesn't cost $10,000,000 to make a hit blockbuster game...they make it cost that much so that they can reem us at the checkout line. GO INDEPENDENT GAMERS! Check out a game called Crayon Physics Deluxe to see what I mean. This guy didn't spend millions and made one of the coolest games I've seen in years. If this game doesn't make it onto the DS then Nintendo is high.