8-KOther Events

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report (Oct 6, 2000)

Filed October 6, 2000For Securities:TTWO

Summary

This 8-K filing from Take-Two Interactive Software, Inc. reports on the disposition of assets, specifically the sale of its wholly-owned subsidiary, Toga Holdings B.V., which was the parent company of Pixel Broadband Studios, Ltd. The sale was made to Gameplay.com plc, a UK-based corporation. This transaction signifies a strategic shift for Take-Two, moving away from a specific subsidiary and potentially refocusing on core competencies or divesting non-core assets. The consideration received includes shares in Gameplay.com plc and warrants, along with online distribution rights and a joint marketing agreement, indicating an ongoing strategic relationship. Investors should note the value of the consideration received, which includes a significant equity stake (approximately 18.1%) in Gameplay.com plc, traded on the London Stock Exchange's Alternative Investment Market. The arrangement also includes ongoing revenue-sharing and advertising commitments from Gameplay.com, suggesting potential future upside. The arm's length negotiation of the terms implies a fair market valuation. This event marks a significant operational and financial development for Take-Two Interactive Software, Inc. as of October 2000.

Key Highlights

  • 1Take-Two Interactive Software, Inc. (TTWO) sold its subsidiary Toga Holdings B.V. (parent of Pixel Broadband Studios, Ltd.) to Gameplay.com plc.
  • 2The transaction closed on October 2, 2000.
  • 3Consideration received includes 14,600,044 shares of Gameplay.com plc common stock, representing approximately 18.1% ownership.
  • 4Warrants to purchase one million shares of Gameplay.com stock were also issued.
  • 5Take-Two granted certain on-line distribution rights for its existing and future products to Gameplay.com.
  • 6Gameplay.com issued an additional 771,654 shares to Take-Two as consideration for distribution rights and agreed to provide online advertising and profit sharing.
  • 7A joint marketing agreement was entered into to exploit broadband opportunities.

Frequently Asked Questions

Take-Two Interactive Software, Inc. sold all of the outstanding capital stock of its wholly-owned subsidiary, Toga Holdings B.V. (the parent of Pixel Broadband Studios, Ltd.), to Gameplay.com plc, a United Kingdom corporation.

Take-Two received 14,600,044 shares of Gameplay.com plc common stock, warrants to purchase one million shares of Gameplay.com stock, additional shares for granting online distribution rights, an agreement for Gameplay.com to provide online advertising and share profits from online distribution, and entered into a joint marketing agreement.

Take-Two now owns approximately 18.1% of Gameplay.com's outstanding common stock. Gameplay.com's stock is traded on the Alternative Investment Market of the London Stock Exchange, suggesting potential for future value appreciation or liquidity for Take-Two.

While Take-Two divested a specific subsidiary involved in this area, it has retained online distribution rights for its products and entered into a joint marketing agreement with Gameplay.com. This indicates an ongoing strategic involvement and potential partnership rather than a complete exit from the online space.