Item 1.01. Entry Into a Material Definitive Agreement
Amendment to Agreement and Plan of Merger
On May 4, 2022, Zynga Inc., a Delaware corporation ("Zynga"), entered into the
Second Amendment (the "Second Amendment") to the previously announced Agreement
and Plan of Merger, dated January 9, 2022 (as amended, the "Merger Agreement"),
with Zebra MS I, Inc., a Delaware corporation and a direct wholly-owned
subsidiary of Take-Two, Zebra MS II, Inc., a Delaware corporation and a direct
wholly-owned subsidiary of Take-Two, and Take-Two Interactive Software, Inc., a
Delaware corporation ("Take-Two"). The Second Amendment provides that the
closing of the combination contemplated by the Merger Agreement (the
"Combination") will take place on a date agreed by the parties, which shall be
not more than three business days after the satisfaction or waiver of the
conditions to closing set forth in the Merger Agreement. The foregoing
description of the Second Amendment does not purport to be complete and is
qualified in its entirety by the full text of the Second Amendment, a copy of
which is filed as Exhibit 2.1 hereto and is incorporated by reference herein.
The parties currently anticipate that the closing of the Combination will occur
on May 23, 2022 (the second business day following the date of the respective
special stockholder meetings of Take-Two and Zynga), subject to receipt of the
requisite Zynga and Take-Two stockholder approvals at the special meetings
currently scheduled for May 19, 2022 and the satisfaction of the other remaining
closing conditions. Under the terms of the Merger Agreement, as a result of the
Combination (i) each issued and outstanding share of Class A Common stock of
Zynga, par value $0.00000625 per share ("Zynga Common Stock"), other than
dissenting shares and treasury shares, will be converted into a number of shares
(the "Stock Consideration") of Take-Two's common stock, par value $0.01 per
share ("Take-Two Common Stock"), equal to the Exchange Ratio (as defined below),
and the right to receive $3.50 in cash (the "Cash Consideration" and, together
with the Stock Consideration, the "Merger Consideration"). The "Exchange Ratio"
will be the following: (i) if the Parent Common Stock Price is an amount greater
than $181.88, then the Exchange Ratio is 0.0350; (ii) if the Parent Common Stock
Price is an amount greater than or equal to $156.50 but less than or equal to
$181.88, then the Exchange Ratio (rounded to five decimal places) is an amount
equal to the quotient obtained by dividing (a) $6.36 by (b) the Parent Common
Stock Price; and (iii) if the Parent Common Stock Price is less than $156.50,
then the Exchange Ratio is 0.0406. Assuming a closing date of May 23, 2022, the
"Parent Common Stock Price," which is used to determine the "Exchange Ratio"
under the Merger Agreement, will be measured based on the volume-weighted
average sales price per share taken to four decimal places of Take-Two Common
Stock on the NASDAQ over the consecutive trading period beginning at 9:30 a.m.
New York time on April 20, 2022 (the twenty-third trading day immediately
preceding the closing date) and concluding at 4:00 p.m. New York time on May 18,
2022 (the third trading day immediately preceding the closing date), as
calculated by Bloomberg Financial LP under the function "VWAP" (or, if not
available, in another authoritative source mutually selected by the parties).
Further details relating to the Combination and the Merger Agreement may be
found in the joint proxy statement/prospectus, dated April 7, 2022, filed by
Take-Two with the Securities and Exchange Commission (the "SEC") on April 7,
2022. Take-Two will disclose the final Exchange Ratio in connection with the
closing of the Combination.
Forward-Looking Statements
Statements contained herein which are not historical facts may be considered
forward-looking statements under federal securities laws and may be identified
by words such as "anticipates," "believes," "estimates," "expects," "intends,"
"plans," "potential," "predicts," "projects," "seeks," "should," "will," or
words of similar meaning and include, but are not limited to, statements
regarding the proposed business combination of Take-Two and Zynga and the
outlook for Take-Two's or Zynga's future business and financial performance.
Such forward-looking statements are based on the current beliefs of Take-Two and
Zynga as well as assumptions made by and information currently available to
them, which are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual outcomes and results may
vary materially from these forward-looking statements based on a variety of
risks and uncertainties including: the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger agreement;
the failure to satisfy remaining conditions to completion of the proposed
combination on a timely basis or at all; risks that the proposed combination
disrupts each company's current plans and operations; the diversion of the
attention of the respective management teams of Take-Two and Zynga from their
respective ongoing business operations; the ability of either Take-Two, Zynga or
the combined company to retain key personnel; the ability to realize the
benefits of the proposed combination, including net bookings opportunities and
cost synergies; the ability to successfully integrate Zynga's business
with Take-Two's business or to integrate the businesses within the anticipated
timeframe; the outcome of any legal proceedings that may be instituted
against Take-Two, Zynga or others following announcement of the proposed
combination; the amount of the costs, fees, expenses and charges related to the
proposed combination; the uncertainty of the impact of the COVID-19 pandemic and
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measures taken in response thereto; the effect of economic, market or business
conditions, including competition, consumer demand and the discretionary
spending patterns of customers, or changes in such conditions, have
on Take-Two's, Zynga's and the combined company's operations, revenue, cash
flow, operating expenses, employee hiring and retention, relationships with
business partners, the development, launch or monetization of games and other
products, and customer engagement, retention and growth; the risks of
conducting Take-Two's and Zynga's business internationally; the impact of
changes in interest rates by the Federal Reserve and other central banks; the
impact of potential inflation, volatility in foreign currency exchange rates and
supply chain disruptions; the ability to maintain acceptable pricing levels and
monetization rates for Take-Two's and Zynga's games; and risks relating to the
market value of Take-Two's common stock to be issued in the proposed
combination.
Other important factors and information are contained in the joint proxy
statement/prospectus mailed by Take-Two to its stockholders in connection with
the proposed business combination of Take-Two and Zynga and in Take-Two's and
Zynga's most recent Annual Reports on Form 10-K, including the risks summarized
in the section entitled "Risk Factors," in Take-Two's and Zynga's most recent
Quarterly Reports on Form 10-Q, and in each company's other periodic filings
with the SEC, which can be accessed at www.take2games.com in the case
of Take-Two, http://investor.zynga.com in the case of Zynga, or www.sec.gov. All
forward-looking statements are qualified by these cautionary statements and
apply only as of the date they are made. Neither Take-Two nor Zynga undertakes
any obligation to update any forward-looking statement, whether as a result of
new information, future events or otherwise.
Additional Information and Where to Find It
This communication relates to a proposed business combination of Take-Two and
Zynga. In connection with the proposed business combination Take-Two filed a
registration statement on Form S-4 with the U.S. Securities and Exchange
Commission (the "SEC"), that includes a joint proxy statement/prospectus. The
registration statement on Form S-4, including the joint proxy
statement/prospectus, provides details of the proposed combination and the
attendant benefits and risks. The registration statement was declared effective
on April 7, 2022 and the definitive joint proxy statement/prospectus was sent
to Take-Two and Zynga stockholders. This communication is not a substitute for
the registration statement on Form S-4, including the joint proxy
statement/prospectus, or any other document that Take-Two or Zynga may file with
the SEC or send to their respective stockholders in connection with the proposed
combination. Investors and security holders are urged to read the registration
statement on Form S-4, including the definitive joint proxy
statement/prospectus, and all other relevant documents filed with the SEC or
sent to Take-Two's or Zynga's stockholders as they become available because they
will contain important information about the proposed combination. All
documents, when filed, will be available free of charge at the SEC's website
(www.sec.gov). You may also obtain these documents by
contacting Take-Two's Investor Relations department at contact@take2games.com;
or by contacting Zynga's Investor Relations department at investors@zynga.com.
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
EXHIBIT
NO. DESCRIPTION
2.1 Second Amendment to the Agreement and Plan of Merger, dated as of
May 4, 2022 by and among Take-Two Interactive Software, Inc., Zebra
MS I, Inc., Zebra MS II, Inc. and Zynga Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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