TAKE-TWO PROPOSAL 1: APPROVAL OF THE SHARE ISSUANCE
This joint proxy statement/prospectus is being furnished to you as a Take-Two stockholder in connection with the solicitation of proxies by the Take-Two board of directors for use at the Take-Two special meeting. At the Take-Two special meeting, Take-Two is asking Take-Two stockholders to consider and vote upon a proposal to approve the issuance of shares of Take-Two common stock in connection with the combination for purposes of applicable Nasdaq rules. In connection with the combination, based on the number of shares of Zynga common stock outstanding as of March 28, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, Take-Two expects to issue approximately 46.219 million shares of Take-Two common stock to Zynga stockholders pursuant to the merger agreement and, as further described under the section titled “Unaudited Pro Forma Condensed Combined Financial Information”, Take-Two also expects to issue approximately 7.661 million shares of Take-Two common stock in connection with the expected settlement of Zynga’s two outstanding series of convertible notes due 2024 and 2026 following the completion of the combination. The actual number of shares of Take-Two common stock to be issued to Zynga stockholders pursuant to the merger agreement in connection with the combination will be based on the number of shares of Zynga common stock outstanding at such time and the following exchange ratio of a share of Take-Two common stock for each share of Zynga common stock: (i) if the Take-Two common stock price (calculated as described under the section titled “The Merger Agreement”) is an amount greater than $181.88, then the exchange ratio is 0.0350; (ii) if the Take-Two 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 is an amount equal to the quotient (rounded to five decimal places) obtained by dividing (x) $6.36 by (y) the Take-Two common stock price; and (iii) if the Take-Two common stock price is less than $156.50, then the exchange ratio is 0.0406. Because the exchange ratio will depend on the market price of Take-Two common stock prior to the effective time of the combination, the number of shares of Take-Two common stock to be issued in connection with the combination is not fixed and is uncertain. Based on the number of shares of Take-Two common stock and Zynga common stock outstanding as of March 28, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the combination (and the expected settlement of Zynga’s two outstanding series of convertible notes due 2024 and 2026), the current Take-Two stockholders are expected to own approximately 68.2% of the outstanding shares of Take-Two common stock and former Zynga stockholders (including former holders of the Zynga convertible notes) are expected to own approximately 31.8% of the outstanding shares of Take-Two common stock.
The Take-Two board of directors, after careful consideration, unanimously determined that the combination and the share issuance, on the terms and subject to the conditions set forth in the merger agreement, are advisable and fair to, and in the best interests of, Take-Two and its stockholders, and approved the merger agreement and the transactions contemplated thereby, including the merger, subsequent merger, and the share issuance.
The Take-Two board of directors unanimously recommends that Take-Two stockholders vote “FOR” the Take-Two share issuance proposal
Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two share issuance proposal requires the affirmative vote of a majority of votes cast on the Take-Two share issuance proposal as well as the affirmative vote of the holders of a majority of the stock having voting power present in person or represented by proxy at the Take-Two special meeting. Any shares not present or represented by proxy (including due to the failure of a Take-Two stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions with respect to any proposals at the Take-Two special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Take-Two share issuance proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by proxy to vote on the Take-Two share issuance proposal will be counted as a vote “AGAINST” the Take-Two share issuance proposal for the purposes of the requirement that the Take-Two share issuance proposal receive the affirmative vote of the holders of a majority of the Take-Two common stock having voting power present in person or represented by proxy at the Take-Two special meeting. In addition, if a Take-Two stockholder who holds shares in “street name” through a bank, broker or other nominee provides voting instructions for one or more other proposals, but not for the Take-Two share issuance proposal, it will have the same effect as a vote “AGAINST” the Take-Two share issuance proposal.
THE TAKE-TWO BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TAKE-TWO STOCKHOLDERS VOTE “FOR” THE TAKE-TWO SHARE ISSUANCE PROPOSAL
