Soleil Says EA Offer Does Not Fully Value Take-Two (TTWO)
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Soleil Securities Group issued a research report this morning commenting about Electronic Arts (Nasdaq: ERTS) unsolicited $26/share bid for Take-Two Interactive (Nasdaq: TTWO).
The firm said it agrees with Take-Two in rejecting the $2 billion offer as it believes EA has undervalued the potential for the upcoming launch of Grand Theft Auto IV and better earnings related to recent restructuring activities.
Soleil points out that EA's bid values Take-Two at about 18.8x a FY08 EPS estimate of $1.38, which is a 29% discount compared to its peer group's average P/E multiple of 26.5x. The firm said that if EA valued Take-Two in-line with its peer group, it would could have offered $36.57.
Take-Two Interactive Software, Inc. engages in the development, publication, and distribution of interactive software games designed for personal computers, video game consoles, and handheld platforms worldwide.
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