8-KLeadership ChangesMaterial AgreementsOther Events+1

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Material Agreement (Nov 27, 2013)

Filed November 27, 2013For Securities:TTWO

Summary

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 million, 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.

Key Highlights

  • 1Take-Two Interactive repurchased 12,020,744 shares of common stock from the Icahn Group for $16.93 per share, totaling approximately $203.5 million.
  • 2The share repurchase was funded entirely by the company's available cash and cash equivalents.
  • 3The transaction was approved by the Board of Directors following a recommendation from a committee of independent directors.
  • 4A material definitive agreement dated January 20, 2010, with the Icahn Group was mutually terminated concurrently with the share repurchase.
  • 5The termination of the agreement led to the immediate resignations of three Icahn Group-affiliated directors: Brett Icahn, James Nelson, and SungHwan Cho.
  • 6Michael Dornemann and J Moses were appointed as interim members of the Audit Committee following the director resignations.

Frequently Asked Questions

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.

The share repurchase was financed using the company's available cash and cash equivalents on hand.

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.

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.