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Posted Friday, February 29, 2008 12:52 PM

Big Bank Take Little Bank, Part II: Take-Two Discusses ZelnickMedia's Compensation Package, EA's Remarks About Its CEO

N'Gai Croal

In our previous post, Electronic Arts vice president of corporate communications Jeff Brown gave us EA's side of the news and events related to the company's offer to purchase Take-Two. We reached out to Take-Two for comment as well, regarding ZelnickMedia's revised compensation agreement for running Take-Two and to get their reaction to information we'd received suggesting that future Rockstar games could be delayed as a result of the developer committing the bulk of its studio resources to completing Grand Theft Auto IV in time for its April 29th ship date. Here's what we were told by a company spokesperson:

When did ZelnickMedia first approach Take-Two's board about increasing its compensation package?

The conversation started before December. There had been informal discussions between EA and Take-Two from time to time ever since ZelnickMedia took over Take-Two. There was no indication around the time of the compensation discussions that a formal offer was forthcoming from Take-Two. They'd looked at Take Two in the past and walked away. There was no reason to think a bid was coming, and none was made at that time.

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The timing of the approval of ZelnickMedia's revised compensation package--on February 14th, between the dates of EA's first offer on February 6th and its second offer on February 19th--has raised a number of eyebrows. Why shouldn't observers be suspicious of this? Was it a poison pill of sorts?

Same as answer for Question 1.

EA spokesperson Jeff Brown, in response to Strauss Zelnick's statement in the Wall Street Journal, "I'm a boy scout--everyone knows that about me," replied, "Maybe his shareholders should ask which Merit Badge he expects to get for this." How do you respond?

The process was above board. Pristine.

I have it on good authority that Rockstar Games, in order to ensure the completion of Grand Theft Auto IV by its rescheduled date of April 29th, has committed the vast majority of its internal production resources to shipping GTA IV on time. This means that future Rockstar games like Midnight Club: Los Angeles, Red Dead Revolver 2, Max Payne 3 and others will in all likelihood be delayed. What impact do you expect the delay of those titles to have on both Take-Two's stock price and your ability to either fend off EA's bid or get them to pay a higher price?

GTA is fully on track. And the company is fully focused on delivering all titles on time.

To see Electronic Arts' original remarks, click here.

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