Take-Two Withdraws Codemasters Takeover Bid

In early November, we reported Take-Two Interactive was in the process of purchasing Codemasters, the studio behind the DIRT racing games as well as the Midnight Club and Overlord franchises.  That bid has now been withdrawn in the face of a better offer from Electronic Arts.

As reported by Gamesindustry.biz, Take-Two informed their investors in a statement that it has “lapsed its offer” to purchase Codemasters.  Take-Two had reserved the right to do so if Codemasters did not convene a shareholder meeting by January 12.  The statement concluded with the assurance that Take-Two would “continue to pursue selectively organic and inorganic opportunities that are designed to enhance the company’s long-term growth and deliver results to its shareholders.”

The original Take-Two offer valued Codemasters at $1.1 billion USD.  EA’s offer, which appeared roughly a month later, upped the valuation to $1.2 billion.  It was at that time that the board of directors for Codemasters withdrew their recommendation to sell to Take-Two.  There has not been any word as of yet regarding the final timetable for EA’s acquisition or what Codemaster’s role within the company will be.

Food For Thought

The circumstances around this particular deal, especially EA’s counter-offer, is not typically seen in the games industry.  Usually, one company makes an offer and the other company accepts with minimal fanfare.  Only in very unusual circumstances will you see multiple companies involved in anything remotely resembling a bidding war.  What’s more surprising is that Codemasters isn’t exactly a household name.  They’ve got a decent back catalog, but they’re not necessarily in the same league as Bioware or Bethesda.  Take-Two’s offer valued the company 11% higher than what it was worth at the time, which makes EA’s incrementally improved offer all the more baffling, since there doesn’t seem to be anything particularly justifying the price.  We’ll have to see what EA will announce, if anything.

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