Take-Two Interactive, the game publisher best known for the Grand Theft Auto series, announced Monday that it is considering selling itself outright.
But with the "Hot Coffee" scandal, a stock-option backdating probe that yielded criminal charges against the founder, and shareholder attempts to replace the board of directors and CEO, industry analysts aren't sure who'd be buying.
Last month, analyst Michael Pachter of Wedbush Morgan Securities downgraded his rating of Take-Two stock to "sell," saying the shares were overvalued. At the same time, he addressed the possibility of the publisher being acquired, sold in pieces, or made a target of activist shareholders, calling each scenario unlikely.
Pachter is sticking to his assessments of the company's prospects with the for-sale announcement.
"This is crazy, and no, my views are not changing," he told GameSpot. Pachter said a sale is unlikely, noting that a prospective buyer could have picked up the game publisher during its stock slump last year for about half what it would have to pay now. In last month's note, Pachter pegged a purchase price of $2 billion, including a premium on the stock price and restructuring costs.
"I can't see a sale happening, unless there is truly a 'greater fool' out there," Pachter said Monday.
Nollenberger Capital Partners analyst Todd Greenwald ran down a handful of possible purchasers. Electronic Arts has the resources to pull off such an acquisition and new CEO John Riccitiello would be more inclined to pull the trigger on such a deal than former head Larry Probst, Greenwald said. However, he wasn't sure if the publisher's corporate culture would be a welcome fit for the employees at Take Two's Rockstar Games, the developer of controversial franchises like Grand Theft Auto and Manhunt.
"Ubisoft might be able to pull it off," Greenwald said. "Other than that, Activision and Elevation Partners are the only other real possibilities I see. I don't see a News Corp. or Viacom going for it."
Whether the company is sold outright or the investor group succeeds in overhauling the board of directors and installing a new CEO, Greenwald sees it as good news for shareholders. "Given their studios and franchises," he said, "Take-Two should be able to be a far more profitable company than it currently is."
Brendan Sinclair reports for GameSpot.