TAKE-TWO INVESTORS BRACE FOR MEETING

Electronic Arts’ $2 billion tender offer for rival Take-Two Interactive is due on Friday, but the next big test for the deal comes tomorrow when Take-Two holds its annual meeting.

Take-Two investors will not be voting on the EA offer at the meeting. But they will be casting ballots for the re-election of the company’s board of directors, helmed by Chairman Strauss Zelnick, and on a revised management agreement that will see a greater stock payout to the Zelnick team in the event of a sale.

Those votes – particularly the vote on the management agreement which was pushed through just ahead of the disclosure of EA’s offer – are being viewed by some analysts as a referendum on the shareholder base’s confidence in the Zelnick management group.

EA’s offer drops to $25.74 per share if the shareholders approve the agreement.

“If they get the shares, that could signal they have more support than many on the street believe,” said UBS analyst Ben Schacter.

Zelnick has been against a merger with EA ahead of the release of “Grand Theft Auto IV” at the end of the month, arguing that the current bid doesn’t properly value the company or its blockbuster franchise.

While analysts are bullish that the game is poised to be one of the biggest hits of the year – Schacter is calling for sales north of 6 million units in the US and more than 10.5 million worldwide – Take-Two’s shareholders remain a wildcard.

Only shareholders that owned Take-Two stock as of Feb. 18 can vote at the meeting.