In the midst of its hostile takeover bid for a rival company, video game firm Electronic Arts is losing one of its key executives.
EA’s chief financial officer, Warren Jenson, is leaving the company and will be replaced shortly, the company said.He has been with EA for six years.
The announcement comes only 11 days after EA made public its US$2 billion hostile tender offer for Take-Two Interactive Software, whose best-known title is “Grand Theft Auto.”
A New Team of Leaders
“[Jenson] has built a first-class finance department and has been a contributor to our growth and strategic initiatives,” said EA CEO John Riccitiello.
Jenson is staying on to assist in the transition as the company brings in a successor. On March 13, EA announced that it was offering Take-Two shareholders US$26 per share about a month after the latter’s directors had turned down previous bids for the company. The current offer expires April 11.
The change at the CFO level couldn’t have anything to do with EA’s move toward Take-Two — “none whatsoever,” Wedbush Morgan Securities analyst Michael Pachter told the E-Commerce Times.
The Executive Shuffle
It’s more a matter of Riccitiello — who returned to the helm in February 2007 after having left the same job and the company three years earlier — deciding who will take key leadership positions with the company, Pachter said.
“He shuffled some people around and brought in new high-profile people,” he noted. Pachter pointed to several examples of this: On March 16, EA appointed John Pleasants as president of global publishing and chief operating officer. Last June, the company brought in Kathy Vrabeck, the president of Activision Publishing, as its president of EA Casual Entertainment. In July, EA hired Peter Moore from Microsoft’s Xbox as president of the EA Sports segment.
“So, really the only position he hadn’t replaced that immediately reported to him was the CFO,” Pachter continued, noting that it’s simply a business move and a continuation of a strategy EA has had in place since before Riccitiello took over as CEO.
“EA stock [hadn’t] moved in three years, and the company replaced its CEO. Now, it hasn’t moved in four years, and they replace the CFO,” he commented. “It’s a matter of the CEO surrounding himself with his own people. You want your own team.”
Meanwhile, all has been quiet on the takeover front, said Evan Wilson, an analyst with Pacific Crest Securities.
“There’s no update,” he told the E-Commerce Times. “We should hear in the next few weeks.”
Although Wilson declined to make any predictions on whether Take-Two shareholders would accept the bid from EA, he did say it was reasonable to speculate that they would.
“Companies don’t launch these types of proxies unless they think there’s a reasonable chance to gain a majority stake,” he asserted.
EA shares were up $1.53 to $49.99 midday Monday on the Nasdaq stock exchange. The stock had a 52-week range of $43.62 and $61.62.
Take-Two Interactive shares were at US$25.75 — up 28 cents from their previous closing price — during midday Monday trading on the Nasdaq. The stock had a 52-week range of $27.61 — reached in mid-February in the wake of EA’s first buyout effort — and $11.82.