EA Prepares itself for Take-2 acquisition, gets $1 billion loan

EA has secured $1 billion funding in order to prepare itself for EA-Take2 merger. (should it happen)

Morgan Stanley Senior Funding Inc, Morgan Stanley Bank, BNP Paribas, BNP Paribas Securities Corp, The Bank of Nova Scotia and KeyBank National Association have made the commitment to provide EA with the additional USD 1 billion in financing at any time prior to January 9, 2009.

EA would be required to repay the loan, plus interest, within a year of the date the funds were initially borrowed or by August 9, 2009.

EA originally proposed $2 billion buy-out offer for Take-Two back in March which was rejected by Take-2. After that, EA tried hostile takeover but that didn’t work as Take-2 told share holders to hold off, after which Take-2 revealed they are willing to discuss take-over terms after GTA IV releases.

Vivendi to raise $1.4 billion in Bonds to Support Their Merger with Activision

Vivendi has decided to raise $1.4billion in bonds to support their upcoming merger with Activision. The two publishing behemoths announced the merger in December 2007, it’s scheduled to be completed by June 2008.

by Forbes.com 

FTC May Save Take-Two From Getting Acquired by EA

According to Justin Blankenship, An ex-FTC Lawyer, EA and Take-Two merger could be stopped by FTC due to anti-trust laws. Blankenship sent a formal post to Newsweek, here’s a snippet:

Until 2004, I worked in a division of the FTC that spent a lot of time looking at technology-related mergers, and had at least taken a good look at mergers like this one. I also have every reason to suspect that my former colleagues would give this deal a hard look, especially in light of Mr. Pachter’s comments, of which I’m sure they’re aware.

If a government agency has problems with a merger, it’s likely because it believes the economic data supports a narrowly defined market (e.g., licensed professional hockey videogames or hockey videogames). The parties to the merger will argue to define the market more broadly (e.g., videogames as a whole, or sports videogames as a whole). Under a broad market definition of all videogames, the merger poses no problems, because the loss of one product in a market of thousands of competitors is a ripple in the sea. However, under a narrow market definition, no other third party can make a licensed professional hockey game (with real player names, team names, stats, etc.) other than EA/Take-Two, granting it an effective monopoly.

Read-up the full post here.