S&P's Jim Yin discusses his outlook for game developers Electronic Arts, Take-Two, Activision, and THQ, as well as the sector as a wholeWhile the battle rages on, video game maker Electronic Arts (ERTS) is likely to win the fight to take over Take-Two Interactive Software (TTWO), says Jim Yin, who follows entertainment software companies for Standard & Poor's Equity Research. He believes EA's $26-per-share offer for Take-Two is already high, given the company's "lumpy" earnings and reliance on one franchise: Grand Theft Auto. Still, he thinks EA will have to raise its bid before declaring victory.
On Mar. 26, Take-Two rejected EA's offer, saying it was inadequate, and adopted a poison pill—a move Yin says was expected. Then, on Mar. 28, EA extended its tender offer to Apr. 18 from Apr. 11. Last month, Yin downgraded EA shares to sell from hold, saying he thinks EA would have difficulty keeping key Take-Two employees and achieving synergy if the merger goes through. He has a hold opinion on Take-Two shares.
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