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Could Activision Wind Up Owning Mortal Kombat Or Take-Two?

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imageBeing a debt-free company that’s sitting on $3 billion in cash has its perks. One of them is the capacity to gobble up competitors that have strengths in areas where you’re deficient—and that’s just what Activision Blizzard plans to do this year. CEO Mike Griffith told Bloomberg that even though the company would be “very disciplined” with its cash, it is on the hunt for games and studios that could fill holes in its product line.

SEE ALSO: Earnings: Activision Swings To Loss In Q4, But Revs Beat Estimates

Griffith declined to name specific targets, but a few high-profile options come to mind: Midway Games needs to offload Mortal Kombat to stay alive, even though a spokesman told MTV Multiplayer that it would prefer not to sell the franchise. Variety estimates that Midway could get at least $40 million for it—which would be a steal for Activision (NSDQ: ATVI), since the franchise has done about $1.5 billion in sales over time. It would also give Activision a blockbuster pure-play fighting franchise, something it currently doesn’t have. 

Then there’s GTA and BioShock publisher Take-Two Interactive (NSDQ: TTWO). Take-Two fought off EA’s takeover bid last year, arguing that the $2 billion offer was inadequate. But with its stock price at about $6 now—less than half of where it was a year ago—Activision could feasibly snap it up for less than the $26 per share that EA was offering—though it would still be a massive transaction. It would add a number of edgy, action-oriented titles to Activision’s more family-friendly roster.

Mar 4, 2009 7:00 PM ET

Posted In: Entertainment, Games, Money, M&A & Venture Capital, Mergers & Acquisitions, activision blizzard

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