01—Abstract
Summary
Summary of the 8-K filed November 27, 2013. Cited figures are marked; the original filing is the authoritative source.
Take-Two Interactive Software, Inc. (TTWO) announced on November 26, 2013, a significant share repurchase transaction and a related termination of a prior agreement with the Icahn Group.
The company repurchased approximately 12 million shares of its common stock from the Icahn Group for a total of over $203 milliona, funded by existing cash reserves. This transaction was approved by the Board of Directors, with a committee of independent directors recommending the action. Concurrently with the share repurchase, the Company and the Icahn Group mutually terminated a 2010 agreement.
This termination also resulted in the immediate resignations of three directors affiliated with the Icahn Group – Brett Icahn, James Nelson, and SungHwan Cho – from the Board of Directors, effective upon the closing of the repurchase. The company has appointed two existing directors to its Audit Committee on an interim basis.
02—Key points
Key Highlights
- Take-Two Interactive repurchased 12,020,744 shares of common stock from the Icahn Group for $16.93 per share, totaling approximately $203.5 million.
- The share repurchase was funded entirely by the company's available cash and cash equivalents.
- The transaction was approved by the Board of Directors following a recommendation from a committee of independent directors.
- A material definitive agreement dated January 20, 2010, with the Icahn Group was mutually terminated concurrently with the share repurchase.
- The termination of the agreement led to the immediate resignations of three Icahn Group-affiliated directors: Brett Icahn, James Nelson, and SungHwan Cho.
- Michael Dornemann and J Moses were appointed as interim members of the Audit Committee following the director resignations.
03—Questions
Frequently Asked Questions
What was the primary purpose of this Form 8-K filing?
The primary purpose of this Form 8-K filing was to report Take-Two Interactive Software, Inc.'s entry into a material definitive agreement for a significant share repurchase with the Icahn Group, the termination of a prior agreement with the same group, and the resulting resignations of directors.
How did Take-Two Interactive finance the share repurchase?
The share repurchase was financed using the company's available cash and cash equivalents on hand.
What is the significance of the Icahn Group's directors resigning?
The resignations of Brett Icahn, James Nelson, and SungHwan Cho from the Board of Directors, as a consequence of the share repurchase and termination of prior agreements, represent a significant shift in the company's board composition and potentially a reduction in influence by the Icahn Group.
What is the financial impact of the share repurchase on Take-Two Interactive?
The repurchase will reduce the number of outstanding shares by approximately 12 million and decrease the company's cash and cash equivalents by over $203 million. This could lead to an increase in earnings per share (EPS) due to fewer shares outstanding, assuming consistent net income, but also reduces the company's liquidity.
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