Is Activision Considering an Acquisition of Take-Two?
Back in 2008, Electronic Arts attempted to purchase Take-Two Interactive, even trying a hostile takeover when its initial bid was rejected. That obviously failed and Take-Two has remained on its own ever since as a publicly traded company. Now, over six years later, one analyst is fueling rumors that Activision Blizzard is trying to acquire Take-Two. Mike Hickey, an equity researcher for the Benchmark Company, claims that the two companies were engaged in an "emerging romance," and that acquiring Take-Two would be a "no-brainer" for Activision.
With Destiny costing Activision $500 million to create, Hickey sees that venture as "difficult to annualize," which is something Activision typically likes to do. By acquiring Take-Two, Hickey's theory is that Activision could essentially annualize its future performance by the sheer number of high-profile franchises it would take over, such as Grand Theft Auto, Red Dead, Borderlands, NBA 2K, BioShock, and more. In addition, Hickey feels there are "shared cinematic ambitions" that would play a key role in such a merger. Take-Two is supposedly shopping around a GTA film adaptation, while Activision recruited Academy Award winner Kevin Spacey for its upcoming Call of Duty: Advanced Warfare. While not mentioned by Hickey, we also know that a World of Warcraft movie has long been teased by Blizzard.
All that being said, not every analyst holds Hickey's beliefs. Piers Harding-Rolls, head of games at major analyst IHS, told GamesIndustry.biz that the acquisition is unlikely. "Activision's MO is relatively anti-risk and it has a calculated long-term growth strategy based on establishing and developing billion dollar franchises that unlock large amounts of value for the company," Harding-Rolls explained. "Activision is well placed to deliver that once again following the Skylanders success with Destiny and I don't believe acquiring Take Two and its stable of IP fits with this strategy." That being said, he does think Activision is looking for "further growth opportunities" and certainly thinks a movie opportunity would make sense, especially since "a number of its franchises are longer in the tooth or more competitively challenged than before."
Whether the rumor is true or not, shareholders seem pleased with the news, as the stock prices for both companies rose on Friday and are once again seeing a slight increase today (there was no trading Monday due to the holiday).