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Take-Two Borrows $200 Million, Could be Planning Acquisition

November 10, 2011 Written by Sebastian Moss

After a quarter which lost the publisher over $47 million, Take-Two has announced that it’s issuing $200 million in convertible senior notes that will be repaid in 2016, and also “expects to grant the initial purchasers an option to purchase up to $30 million of additional notes to cover over-allotments.” But what will Take-Two do with $200 million?

Take-Two says that the “net proceeds from the sale of the notes will be used for general corporate purposes, which may include acquisitions and other strategic investments.” Wedbush Securities’ Michael Pachter told Industry Gamers that an acquisition is likely and may be in the mobile and social space:

We think that an acquisition is imminent, and believe Take-Two is likely exploring an investment in the mobile or social games space. We note that digitally delivered content accounted for 25% of net revenue in Q2:12, and management consistently lists digital as a component of the company’s growth strategy.

Take-Two fell 88 cents, or 5.7%, to $14.57 in late morning trading.