Riccitiello pulled plug on Take-Two deal previously

Electronic Arts CEO John Riccitiello has revealed that a transaction to buy Take-Two was at an advanced stage last April, and would have gone ahead, had he not pulled the plug at the eleventh hour and recommended against it to the EA board.

Speaking in an investor conference call on the new offer to buy the rival publisher for USD 2 billion, Riccitiello explained his reasoning for that decision back then.

"In terms of my prior interest in Take-Two, I'd draw your attention to a time about a year ago. Take-Two announced then they were considering a strategic transaction with a company in the sector.

"Let me tell you, that was Electronic Arts. I was joining Electronic Arts at the time, we were very serious about concluding the transaction at that point in time, and we got very close to making a proposal that I think would have concluded the transaction.

"At the eleventh hour I made a call to the board of Electronic Arts that they should not pursue it for the simple reason that I realised that we, within EA, were going to go through some change.

"I expected to be introducing an organisation much like we have, with the label organisation, and then I was going to bring in new talent as part of that.

"What I didn't want Electronic Arts to do was drop the ball on execution, so I purposely waited until late in the summer to reach out to Strauss [Zelnick, Take-Two executive chairman], after we had our label organisation in place, after our executive teams were functioning, after we'd established new strategy that we cleared with our board in November.

"So really in November I felt that we were ready, which is why I reached out to Strauss in December.

"I have had a long-standing interest in the transaction, it manifested itself most directly in March and April, it didn't get concluded for the reasons I've just outlined, the timing was driven by my judgement of EA's readiness to execute it well, which is why we're pursuing it at this time."

The call additionally outlined the timeline of developments in this latest offer, including that "reach out" to Strauss Zelnick in December 2007.

A verbal offer was made by Riccitiello in December, and in January this year Zelnick declined to negotiate.

That was followed up with an offer of USD 25 per share on February 6, which was declined on February 15, while the latest offer of USD 26 was tabled on February 16 and declined last Friday, February 19.

That offer remains open, and Riccitiello is confident that the deal will go ahead, and is in the best interests of both sets of shareholders.