ZYNGA PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT
This joint proxy statement/prospectus is being furnished to you as a Zynga stockholder in connection with the solicitation of proxies by the Zynga board of directors for use at the Zynga special meeting. At the Zynga special meeting, Zynga is asking Zynga stockholders to consider and vote upon a proposal to adopt the merger agreement, pursuant to which Merger Sub 1 will merge with and into Zynga, with Zynga continuing as the surviving corporation and as a wholly owned subsidiary of Take-Two and, immediately following the merger, Zynga will merge with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation. Upon completion of the combination, each share of Zynga common stock outstanding as of immediately prior to the effective time, other than dissenting shares and treasury shares, will be converted into the right to receive (i) a number of shares of Take-Two common stock equal to the exchange ratio (as described below) with a cash payment in lieu of fractional shares of Take-Two common stock resulting from such calculation and (ii) $3.50 in cash, without interest and less any applicable withholding taxes. The “exchange ratio” is subject to a two-way collar mechanism and will be determined as follows: (i) if the Take-Two common stock price (as defined below) is an amount greater than $181.88, then the exchange ratio will be 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 will be 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 will be 0.0406. The “Take-Two common stock price” will be the volume-weighted average sales price per share of Take-Two common stock on the Nasdaq Global Select Market for the consecutive period beginning at 9:30 a.m. New York time on the twenty-third trading day immediately preceding the closing date of the combination and concluding at 4:00 p.m. New York time on the third trading day immediately preceding such closing date.
The Zynga board of directors, after careful consideration, unanimously determined that the combination is fair to and in the best interests of Zynga and its stockholders, and approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and subsequent merger.
The Zynga board of directors accordingly unanimously recommends that Zynga stockholders vote “FOR” the Zynga merger proposal.
The combination and a summary of the terms of the merger agreement are described in more detail under “The Combination” and “The Merger Agreement,” and Zynga stockholders are encouraged to read the full text of the merger agreement, which is attached as Annex A hereto.
Assuming a quorum is present at the Zynga special meeting, approval of the Zynga merger proposal requires the affirmative vote of a majority of the holders of a majority of the outstanding shares of Zynga common stock entitled to vote thereon at the close of business on the Zynga record date. If a Zynga stockholder fails to vote, fails to instruct its bank, broker or nominee to vote with respect to the Zynga merger proposal or abstains from voting, it will have the same effect as a vote “AGAINST” the Zynga merger proposal.
It is a condition to the completion of the combination that Zynga stockholders approve the Zynga merger proposal.
THE ZYNGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ZYNGA STOCKHOLDERS VOTE “FOR” THE ZYNGA MERGER PROPOSAL
