S-4 1 d420326ds4.htm S-4 S-4
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As filed with the Securities and Exchange Commission on March 11, 2022

Registration No. 333-                

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

TAKE-TWO INTERACTIVE SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   7372   51-0350842
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

110 West 44th Street

New York, New York, 10036

(646) 536-2842

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Strauss Zelnick

Chairman and Chief Executive Officer

Take-Two Interactive Software, Inc.

110 West 44th Street

New York, New York 10036

(646) 536-3001

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Adam M. Turteltaub, Esq.

Sean Ewen, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue

New York, New York 10016
(212) 728-8000

  Phuong Phillips
Chief Legal Officer and Secretary
Zynga Inc.
699 Eighth Street
San Francisco, California 94103
(855) 449-9642
 

Steven V. Bernard

Martin W. Korman

Douglas K. Schnell

Remi P. Korenblit
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
(650) 493-9300

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and upon completion of the combination described in the enclosed joint proxy statement/prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   

    

Accelerated filer 

 

Non-accelerated filer

       Smaller reporting company  

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

☐ Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

☐ Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

 

 

 


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The information in this document is not complete and may change. The registrant may not complete the offer and issue these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This document is not an offer to sell these securities, and the registrant is not soliciting an offer to buy these securities, in any state or jurisdiction in which such offer is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION, DATED MARCH 11, 2022

 

     LOGO

  

LOGO

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

Dear Take-Two Stockholders and Zynga Stockholders:

On January 9, 2022, Take-Two Interactive Software, Inc., which is referred to as “Take-Two,” Zebra MS I, Inc., a wholly owned subsidiary of Take-Two, which is referred to as “Merger Sub 1,” Zebra MS II, Inc., a wholly owned subsidiary of Take-Two, which is referred to as “Merger Sub 2,” and Zynga Inc., which is referred to as “Zynga,” entered into an Agreement and Plan of Merger, as it may be amended from time to time, which is referred to as the “merger agreement,” that provides for the combination of Take-Two and Zynga. Upon the terms and subject to the conditions set forth in the merger agreement, Take-Two will acquire all of the outstanding shares of Zynga through a merger of Merger Sub 1 with and into Zynga, which is referred to as the “merger,” 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, which is referred to as the “subsequent merger” and together with the merger, the “combination.”

Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each outstanding share of Class A common stock, par value $0.00000625 per share, of Zynga, which is referred to as “Zynga common stock,” (subject to certain exceptions set forth in the merger agreement) will be converted into the right to receive (i) a number of shares of common stock, par value $0.01 per share, of Take-Two, which is referred to as “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 (as defined below) 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 (as defined below) 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. Take-Two stockholders will continue to own their existing shares of Take-Two common stock.

As noted above, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. The exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. The Take-Two common stock price and the exchange ratio will not be determinable until the third trading day immediately preceding the closing date of the combination. Take-Two common stock is traded on the Nasdaq Global Select Market, which is referred to as “Nasdaq,” under the symbol “TTWO.” Zynga common stock is traded on the Nasdaq Global Select Market under the symbol “ZNGA.” Based on the closing price of Take-Two common stock on Nasdaq of $        on            , the latest practicable trading day prior to the date of the accompanying joint proxy statement/prospectus, the exchange ratio is              and the implied value of the consideration payable to Zynga stockholders in the combination was approximately $        per share of Zynga common stock.


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Based on the closing price of Take-Two common stock on Nasdaq of $         and the number of shares of Take-Two common stock and Zynga common stock outstanding on            , the latest practicable date prior to the date of the accompanying joint proxy statement/prospectus, it is expected that Take-Two will issue approximately              million shares of Take-Two common stock in the combination and, upon completion of the combination, the current Take-Two stockholders are expected to own approximately    % of the outstanding shares of Take-Two common stock and former Zynga stockholders are expected to own approximately    % of the outstanding shares of Take-Two common stock.

Take-Two and Zynga will each hold a special meeting of their respective stockholders to vote on the proposals necessary to complete the combination. Such special meetings are referred to as the “Take-Two special meeting” and the “Zynga special meeting,” respectively. We encourage you to obtain current quotes for both Take-Two common stock and Zynga common stock before voting at the Take-Two special meeting or the Zynga special meeting.

At the Take-Two special meeting, Take-Two stockholders will be asked to consider and vote on (i) a proposal to approve the issuance of shares of Take-Two common stock to Zynga stockholders in connection with the combination for purposes of applicable Nasdaq rules, which proposal is referred to as the “Take-Two share issuance proposal”; (ii) a proposal to approve and adopt an amendment to the Take-Two Restated Certificate of Incorporation to increase the number of shares of Take-Two common stock that the Take-Two board of directors is authorized to issue, which is referred to as the “Take-Two charter amendment proposal”; and (iii) a proposal to approve the adjournment of the Take-Two special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal, which is referred to as the “Take-Two adjournment proposal.” The Take-Two board of directors unanimously recommends that Take-Two stockholders vote “FOR” each of the proposals to be considered at the Take-Two special meeting.

At the Zynga special meeting, Zynga stockholders will be asked to consider and vote on (i) a proposal to adopt the merger agreement, which proposal is referred to as the “Zynga merger proposal,” (ii) a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, and (iii) a proposal to approve the adjournment of the Zynga special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zynga special meeting to approve the Zynga merger proposal. The Zynga board of directors unanimously recommends that Zynga stockholders vote “FOR” each of the proposals to be considered at the Zynga special meeting.

We cannot complete the combination unless the Take-Two share issuance proposal and the Take-Two charter amendment proposal are approved by Take-Two stockholders and the Zynga merger proposal is approved by Zynga stockholders. Your vote on these matters is very important, regardless of the number of shares you own. Whether or not you plan to virtually attend your company’s respective special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares at the applicable special meeting.

 

 

The accompanying joint proxy statement/prospectus provides you with important information about Take-Two, Zynga, the combination, the merger agreement and the special meetings. We encourage you to read the entire document carefully, in particular the information under “Risk Factors” beginning on page 24 for a discussion of material risks relevant to the combination.

We look forward to the successful completion of the combination.


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Sincerely,

 

  

 

Strauss Zelnick

Chairman of the Board of Directors and Chief Executive Officer

Take-Two Interactive Software, Inc.

  

 

Frank Gibeau

Chief Executive Officer and Director

Zynga Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Take-Two common stock to be issued in connection with the merger or passed upon the adequacy or accuracy of the accompanying joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated             , 2022 and is first being mailed to Take-Two stockholders and Zynga stockholders on or about             , 2022.


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LOGO

Take-Two Interactive Software, Inc.

110 West 44th Street

New York, New York, 10036

(646) 536-2842

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON             , 2022

Notice is hereby given that Take-Two Interactive Software, Inc., which is referred to as “Take-Two,” will hold a special meeting of its stockholders, which is referred to as the “Take-Two special meeting,” virtually via live webcast on             , 2022, beginning at             , Eastern Time.

Take-Two stockholders will be able to virtually attend and vote at the Take-Two special meeting by visiting             , which is referred to as the “Take-Two special meeting website.”

The Take-Two special meeting will be held for the purpose of Take-Two stockholders considering and voting on the following proposals:

 

  1.

to approve the issuance of shares of Take-Two common stock to the stockholders of Zynga Inc., which is referred to as “Zynga,” in connection with the combination of Take-Two and Zynga, which is referred to as the “combination,” contemplated by the Agreement and Plan of Merger, dated January 9, 2022, as it may be amended from time to time, which is referred to as the “merger agreement,” by and among Take-Two, Zynga and two wholly owned subsidiaries of Take-Two, Zebra MS I, Inc., and Zebra MS II, Inc., which issuance is referred to as the “share issuance” and which proposal is referred to as the “Take-Two share issuance proposal”;

 

  2.

to approve and adopt an amendment to the Take-Two Restated Certificate of Incorporation in connection with the consummation of the combination and the share issuance to increase the number of authorized shares of Take-Two capital stock from 205,000,000 to 305,000,000, of which 300,000,000 shares will be common stock and 5,000,000 shares will be preferred stock, which amendment is referred to as the “charter amendment” and which proposal is referred to as the “Take-Two charter amendment proposal”; and

 

  3.

to approve the adjournment of the Take-Two special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal, which proposal is referred to as the “Take-Two adjournment proposal.”

These proposals are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Only Take-Two stockholders of record at the close of business on             , 2022, the record date for the Take-Two special meeting, which is referred to as the “Take-Two record date,” are entitled to notice of and to vote at the Take-Two special meeting and any adjournments or postponements thereof.

The Take-Two board of directors has unanimously determined and resolved that the combination, the share issuance and the charter amendment, 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 has approved the merger


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agreement and the transactions contemplated thereby, including the combination and the share issuance and the charter amendment. Accordingly, the Take-Two board of directors unanimously recommends that Take-Two stockholders vote:

 

   

“FOR” the Take-Two share issuance proposal;

 

   

“FOR” the Take-Two charter amendment proposal; and

 

   

“FOR” the Take-Two adjournment proposal.

Your vote is very important, regardless of the number of shares of Take-Two common stock you own. The parties cannot complete the combination unless both the Take-Two share issuance proposal and the Take-Two charter amendment proposal are approved by Take-Two stockholders.

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. Approval of the Take-Two charter amendment proposal requires the affirmative vote of the majority of the shares of Take-Two common stock outstanding at the close of business on the Take-Two record date. Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two adjournment proposal requires 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. If the Take-Two charter amendment proposal is approved, but the combination is not completed for any reason, Take-Two’s board of directors may choose, in its discretion, to implement the Take-Two charter amendment proposal.

Whether or not you plan to virtually attend the Take-Two special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares of Take-Two common stock at the Take-Two special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) please follow the instructions on the voting instruction form provided by your bank, broker or nominee to vote your shares. The list of Take-Two stockholders entitled to vote at the Take-Two special meeting will be available at Take-Two’s headquarters during regular business hours for examination by any Take-Two stockholder for any purpose germane to the Take-Two special meeting for a period of at least ten days prior to the Take-Two special meeting. The stockholder list will also be available for examination during the Take-Two special meeting via the Take-Two special meeting website.

PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE TAKE-TWO SPECIAL MEETING, VIA THE TAKE-TWO SPECIAL MEETING WEBSITE. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT/ PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, THE MERGER AGREEMENT, THE COMBINATION, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

By Order of the Board of Directors,

 

Matthew K. Breitman

General Counsel Americas and Corporate Secretary

Take-Two Interactive Software, Inc.

New York, New York


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LOGO

Zynga Inc.

699 Eighth Street

San Francisco, California 94103

(855) 449-9642

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON             , 2022

Notice is hereby given that Zynga Inc., which is referred to as “Zynga,” will hold a special meeting of its stockholders, which is referred to as the “Zynga special meeting,” virtually via live webcast on             , 2022, beginning at                 , Pacific Time.

You will be able to virtually attend and vote at the Zynga special meeting by visiting                 , which is referred to as the “Zynga special meeting website.”

Zynga has entered into an Agreement and Plan of Merger, dated January 9, 2022, which is referred to as the “merger agreement,” among Take-Two Interactive Software, Inc., which is referred to as “Take-Two,” Zebra MS I, Inc., a wholly owned subsidiary of Take-Two, which is referred to as “Merger Sub 1,” Zebra MS II, Inc., a wholly owned subsidiary of Take-Two, which is referred to as “Merger Sub 2,” and Zynga, pursuant to which Merger Sub 1 will merge with and into Zynga, which is referred to as the “merger,” followed by the merger of Zynga with and into Merger Sub 2, which is referred to as the “subsequent merger,” and collectively with the merger, the “combination,” upon the terms and subject to the conditions set forth in the merger agreement.

The Zynga special meeting will be held for the purpose of Zynga stockholders considering and voting on the following proposals:

 

  1.

to adopt the merger agreement, as it may be amended from time to time, which proposal is referred to as the “Zynga merger proposal”;

 

  2.

to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which proposal is referred to as the “Zynga compensation proposal”; and

 

  3.

to approve the adjournment of the Zynga special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zynga special meeting to approve the Zynga merger proposal, which proposal is referred to as the “Zynga adjournment proposal.”

These proposals are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Only Zynga stockholders of record at the close of business on             , 2022, the record date for the Zynga special meeting, which is referred to as the “Zynga record date,” are entitled to notice of and to vote at the Zynga special meeting and any adjournments or postponements thereof.

The Zynga board of directors has unanimously determined and resolved that the merger agreement and the combination are advisable and fair to, and in the best interests of, Zynga and its stockholders, and approved the


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merger agreement and the transactions contemplated thereby, including the combination. Accordingly, the Zynga board of directors unanimously recommends that Zynga stockholders vote:

 

   

“FOR” the Zynga merger proposal;

 

   

“FOR” the Zynga compensation proposal; and

 

   

“FOR” the Zynga adjournment proposal.

Your vote is very important, regardless of the number of shares of Zynga common stock you own. The parties cannot complete the transactions contemplated by the merger agreement, including the combination, without approval of the Zynga merger proposal. Approval of the Zynga merger proposal requires the affirmative vote of the holders of a majority of the shares of Zynga common stock outstanding at the close of business on the Zynga record date.

Whether or not you plan to virtually attend the Zynga special meeting, please vote by proxy over the internet using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares of Zynga common stock at the Zynga special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) please follow the instructions on the voting instruction form provided by your bank, broker or nominee to vote your shares. The list of Zynga stockholders entitled to vote at the Zynga special meeting will be available at Zynga’s headquarters during ordinary business hours for examination by any Zynga stockholder for any purpose germane to the Zynga special meeting for a period of at least ten days prior to the Zynga special meeting. The stockholder list will also be available for examination during the Zynga special meeting via the Zynga special meeting website.

PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ZYNGA SPECIAL MEETING VIA THE ZYNGA SPECIAL MEETING WEBSITE. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE JOINT PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, THE MERGER AGREEMENT, THE COMBINATION, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS.

By Order of the Board of Directors,

 

  

Mark Pincus

Director and Non-Executive Chairman

Zynga Inc.

  

Frank Gibeau

Chief Executive Officer and Director

Zynga Inc.

San Francisco, California


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REFERENCES TO ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates important business and financial information about Take-Two Interactive Software, Inc. (“Take-Two”) and Zynga Inc. (“Zynga”) from other documents that Take-Two and Zynga have filed with the U.S. Securities and Exchange Commission (“SEC”) and that are not contained in and are instead incorporated by reference in the accompanying joint proxy statement/prospectus. For a list of documents incorporated by reference in the accompanying joint proxy statement/prospectus, see “Where You Can Find More Information.” This information is available for you, without charge, to review through the SEC’s website at www.sec.gov.

You may request a copy of the accompanying joint proxy statement/prospectus, any of the documents incorporated by reference in the accompanying joint proxy statement/prospectus or other information filed with the SEC by Take-Two or Zynga, without charge, by written or telephonic request directed to the appropriate company at the following contacts:

 

For Take-Two stockholders:

  

For Zynga stockholders:

Take-Two Interactive Software, Inc. Attention:

Corporate Secretary

110 West 44th Street

New York, New York, 10036

(646) 536-2842

  

Office of the Corporate Secretary

c/o Legal Department

699 Eighth Street

San Francisco, California 94103

(855) 449-9642

In order for you to receive timely delivery of the documents in advance of the special meeting of Take-Two stockholders to be held on             , 2022, which is referred to as the “Take-Two special meeting,” or the special meeting of Zynga stockholders to be held on             , 2022, which is referred to as the “Zynga special meeting,” as applicable, you must request the information no later than             , 2022.

If you have any questions about the Take-Two special meeting or the Zynga special meeting, or need to obtain proxy cards or other information, please contact the applicable company’s proxy solicitor at the following contacts:

 

For Take-Two stockholders:

 

 

LOGO

 

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
(800) 322-2885
proxy@mackenziepartners.com

  

For Zynga stockholders:

 

 

LOGO

 

D.F. King & Co., Inc.
48 Wall Street, 22nd Floor

New York, New York 10005
Shareholders may call toll free: (800) 714-3310 Banks and Brokers may call: (212) 269-5550

ZNGA@dfking.com

The contents of the websites of the SEC, Take-Two, Zynga or any other entity are not incorporated in the accompanying joint proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference in the accompanying joint proxy statement/prospectus at these websites is being provided only for your convenience.


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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Take-Two (Registration No. 333-                ), constitutes a prospectus of Take-Two under Section 5 of the Securities Act with respect to the shares of Take-Two common stock to be issued to Zynga stockholders in the transactions contemplated by the Agreement and Plan of Merger, dated January 9, 2022, as it may be amended from time to time, by and among Take-Two, Zebra MS I, Inc., a wholly owned subsidiary of Take-Two (“Merger Sub 1”), Zebra MS II, Inc., a wholly owned subsidiary of Take-Two (“Merger Sub 2”), and Zynga, which is referred to as the “merger agreement.” This document also constitutes a proxy statement of each of Take-Two and Zynga under Section 14(a) of the Exchange Act. This joint proxy statement/prospectus also constitutes a notice of meeting with respect to each of the Take-Two special meeting and the Zynga special meeting.

Take-Two has supplied all information contained or incorporated by reference in this joint proxy statement/ prospectus relating to Take-Two, Merger Sub 1, and Merger Sub 2, and Zynga has supplied all such information relating to Zynga. Take-Two and Zynga have both contributed to such information relating to the combination.

You should rely only on the information contained or incorporated by reference in this joint proxy statement/ prospectus. Take-Two and Zynga have not authorized anyone to provide you with information that is different from that contained or incorporated by reference in this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated                 , and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.

Further, you should not assume that the information incorporated by reference in this joint proxy statement/ prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Take-Two stockholders or Zynga stockholders nor the issuance by Take-Two of shares of Take-Two common stock pursuant to the merger agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Unless otherwise indicated or the context otherwise requires, when used in this joint proxy statement/prospectus:

 

   

“alternative acquisition agreement” refers to a definitive acquisition agreement, merger agreement or similar definitive agreement with respect to a Zynga superior proposal;

 

   

“business day” refers to any day other than (a) Saturday or Sunday or (b) any other day on which banks in the City of New York, NY or San Francisco, CA are permitted or required to be closed;

 

   

“cash consideration” refers to the right of Zynga stockholders to receive $3.50 in cash for each share of Zynga common stock in the merger pursuant to the merger agreement;

 

   

“charter amendment” refers to the amendment to the Take-Two charter in connection with the consummation of the combination and the share issuance to increase the number of authorized shares of Take-Two capital stock from 205,000,000 to 305,000,000, of which 300,000,000 shares will be common stock and 5,000,000 shares will be preferred stock;

 

   

“Code” refers to the Internal Revenue Code of 1986, as amended;

 

   

“combination” refers to the merger and subsequent merger, collectively;

 

   

“combined company” refers to Take-Two following the completion of the combination;

 

   

“DGCL” refers to the General Corporation Law of the State of Delaware;


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“effective time” refers to the date and time when the merger becomes effective under the DGCL, which will be the date and time at which the certificate of merger with respect to the merger is filed with the Secretary of State of the State of Delaware, or such other time as may be mutually agreed to by Take-Two and Zynga and specified in the certificate of merger;

 

   

“end date” refers to January 9, 2023, the date on which, subject to certain limitations in the merger agreement, the merger agreement may be terminated and the combination abandoned by either Take-Two or Zynga;

 

   

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

   

“exchange ratio” refers to the number of shares of Take-Two common stock that Zynga stockholders will be entitled to receive in the merger for each share of Zynga common stock held immediately prior to the effective time pursuant to, and in accordance with, the terms of the merger agreement, which will be calculated as follows: (i) if the Take-Two common stock price 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;

 

   

“GAAP” refers to U.S. generally accepted accounting principles;

 

   

“Goldman Sachs” refers to Goldman Sachs & Co. LLC, financial advisor to Zynga in connection with the combination;

 

   

“HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

“J.P. Morgan” refers to J.P. Morgan Securities LLC, a financial advisor to Take-Two in connection with the combination;

 

   

“LionTree” refers to LionTree Advisors LLC, a financial advisor to Take-Two in connection with the combination;

 

   

“merger agreement” refers to the Agreement and Plan of Merger, dated as of January 9, 2022, as it may be amended from time to time, by and among Take-Two, Merger Sub 1, Merger Sub 2, and Zynga;

 

   

“merger consideration” refers to the cash consideration and the stock consideration, collectively;

 

   

“Merger Sub 1” refers to Zebra MS I, Inc., a Delaware corporation and wholly owned subsidiary of Take-Two, formed for the purpose of effecting the combination;

 

   

“Merger Sub 2” refers to Zebra MS II, Inc., a Delaware corporation and wholly owned subsidiary of Take-Two, formed for the purpose of effecting the combination;

 

   

“merger” refers to the merger of Merger Sub 1 with and into Zynga, with Zynga continuing as the surviving corporation;

 

   

“Nasdaq” refers to the Nasdaq Global Select Market;

 

   

“SEC” refers to the U.S. Securities and Exchange Commission;

 

   

“Securities Act” refers to the Securities Act of 1933, as amended;

 

   

“stock consideration” refers to the right of Zynga stockholders to receive a number of shares of Take-Two common stock equal to the exchange ratio in exchange for each share of Zynga common stock pursuant to the merger agreement, subject to the payment of cash in lieu of fractional shares;

 

   

“subsequent merger” refers to the merger of Zynga, as the surviving corporation in the merger, with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation, to occur immediately following the effective time;


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“share issuance” refers to the issuance of shares of Take-Two common stock to Zynga stockholders in connection with the combination;

 

   

“Take-Two” refers to Take-Two Interactive Software, Inc., a Delaware corporation;

 

   

“Take-Two adjournment proposal” refers to the proposal for Take-Two stockholders to approve the adjournment of the Take-Two special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal;

 

   

“Take-Two alternative acquisition proposal” refers to any proposal or offer (other than by Zynga or any of its affiliates) to purchase or otherwise acquire, directly or indirectly, in one transaction or a series of transactions, (i) beneficial ownership (as defined under Section 13(d) of the Exchange Act) of more than twenty percent (20%) of any class of equity securities of Take-Two pursuant to a merger, reorganization, recapitalization, consolidation or other business combination, sale of shares of capital stock by Take-Two, tender offer, exchange offer or similar transaction, or (ii) any one or more assets or businesses of Take-Two and its subsidiaries that constitute more than twenty percent (20%) of the consolidated revenues or assets of Take-Two and its subsidiaries, taken as a whole;

 

   

“Take-Two board of directors” refers to the board of directors of Take-Two;

 

   

“Take-Two bylaws” refers to the Third Amended and Restated Bylaws of Take-Two adopted on January 9, 2022;

 

   

“Take-Two charter” refers to the Restated Certificate of Incorporation of Take-Two Interactive Software, Inc., dated as of February 3, 1997, as amended;

 

   

“Take-Two charter amendment proposal” refers to the proposal for Take-Two stockholders to approve and adopt the Take-Two charter amendment;

 

   

“Take-Two common stock” refers to the common stock, par value $0.01 per share, of Take-Two;

 

   

“Take-two common stock price” refers to 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;

 

   

“Take-Two intervening event” refers to any event, change, occurrence or development occurring after the date of the merger agreement that materially affects the business, financial condition or operations of Take-Two and was unknown and not reasonably foreseeable to the Take-Two board of directors and executive officers of Take-Two as of the date of the merger agreement (or, if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable to the Take-Two board of directors and executive officers of Take-Two, after due inquiry, as of the date of the merger agreement), prior to the approval of the Take-Two share issuance proposal and the Take-Two charter amendment proposal; provided that the receipt, existence or terms of a Take-Two alternative acquisition proposal or Take-Two superior proposal shall not be deemed to be a Take-Two intervening event;

 

   

“Take-Two record date” refers to                 , 2022;

 

   

“Take-Two recommendation” refers to the recommendation of the Take-Two board of directors that holders of shares of Take-Two common stock approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal;

 

   

“Take-Two share issuance proposal” refers to the proposal for Take-Two stockholders to approve the share issuance;


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“Take-Two special meeting” refers to the special meeting of Take-Two stockholders to consider and vote upon the Take-Two share issuance proposal, the Take-Two charter amendment proposal and the Take-Two adjournment proposal;

 

   

“Take-Two special meeting website” refers to the website that Take-Two stockholders can visit to attend and vote at the Take-Two special meeting, accessible at the following web address:                 ;

 

   

“Take-Two stockholders” refers to holders of Take-Two common stock;

 

   

“Take-Two superior proposal” refers to any Take-Two alternative acquisition proposal (with all percentages in the definition of “Take-Two alternative acquisition proposal” increased to fifty percent (50%)) made by a third party (a) that did not result from or arise out of a material breach of the “no-shop” provision of the merger agreement by Take-Two that the Take-Two board of directors determines in good faith, after consultation with its outside legal counsel and financial advisors and considering such factors as the Take-Two board of directors considers to be appropriate (including the likelihood and timing of consummation of the transactions contemplated by the merger agreement in accordance with its terms), contains terms that are more favorable to Take-Two’s stockholders than the transactions contemplated by the merger agreement, taking into account all terms and conditions of such transaction (including, as applicable, any changes to the terms of the merger agreement committed to by Zynga to the Take-Two board of directors in writing in response to such Take-Two alternative acquisition proposal, any breakup fees, expense reimbursement provisions and financial terms), and (b)(i) that is conditioned upon the termination of the merger agreement or any other failure of the combination to be consummated, or (ii) that otherwise does not expressly endorse or support the merger agreement and the consummation of the combination.

 

   

“Zynga adjournment proposal” refers to the proposal for Zynga stockholders to approve the adjournment of the Zynga special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zynga special meeting to approve the Zynga merger proposal;

 

   

“Zynga alternative acquisition proposal” refers to any proposal or offer (other than by Take-Two, Merger Sub 1 or Merger Sub 2) to purchase or otherwise acquire, directly or indirectly, in one transaction or a series of transactions, (i) beneficial ownership (as defined under Section 13(d) of the Exchange Act) of more than twenty percent (20%) of any class of equity securities of Zynga pursuant to a merger, reorganization, recapitalization, consolidation or other business combination, sale of shares of capital stock by Zynga, tender offer, exchange offer or similar transaction or (ii) any one or more assets or businesses of Zynga and its Subsidiaries that constitute more than twenty percent (20%) of the consolidated revenues or assets of Zynga and its subsidiaries, taken as a whole;

 

   

“Zynga board of directors” refers to the board of directors of Zynga;

 

   

“Zynga bylaws” refers to the Fifth Amended and Restated Bylaws of Zynga adopted on February 25, 2021, as amended by the First Amendment, effective January 9, 2022;

 

   

“Zynga charter” refers to the Seventeenth Amended and Restated Certificate of Incorporation of Zynga Inc., dated as of June 11, 2014;

 

   

“Zynga common stock” refers to the Class A common stock, par value $0.00000625 per share, of Zynga;

 

   

“Zynga compensation proposal” refers to the proposal for Zynga stockholders to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement;

 

   

“Zynga intervening event” refers to any event, change, occurrence or development occurring after the date of the merger agreement that materially affects the business, financial condition or operations of


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Zynga and was unknown and not reasonably foreseeable to the Zynga board of directors and executive officers of the Zynga as of the date of the merger agreement (or, if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable to the board of directors and executive officers of the Zynga, after due inquiry, as of the date of the merger agreement), prior to approval of the Zynga merger proposal; provided that the receipt, existence or terms of a Zynga alternative acquisition proposal or Zynga superior proposal will not be deemed to be a Zynga intervening event;

 

   

“Zynga merger proposal” refers to the proposal for Zynga stockholders to adopt the merger agreement;

 

   

“Zynga recommendation” refers to the recommendation of the Zynga board of directors that the holders of the shares of Zynga common stock approve and adopt the merger agreement and the transactions contemplated thereby, including the merger and the subsequent merger;

 

   

“Zynga record date” refers to                 , 2022;

 

   

“Zynga special meeting” refers to the special meeting of Zynga stockholders to consider and vote upon the Zynga merger proposal, the Zynga compensation proposal, and the Zynga adjournment proposal;

 

   

“Zynga special meeting website” refers to the website that Zynga stockholders can visit to attend and vote at the Zynga special meeting, accessible at the following web address:                 ;

 

   

“Zynga stockholders” refers to holders of Zynga common stock; and

 

   

“Zynga superior proposal” refers to any Zynga alternative acquisition proposal (with all percentages in the definition of “Zynga alternative acquisition proposal” increased to fifty percent (50%)) made by a third party that did not result from or arise out of a material breach of the “no-shop” provision of the merger agreement by Zynga that the Zynga board of directors determines in good faith, after consultation with its outside legal counsel and financial advisors and considering such factors as the Zynga board of directors considers to be appropriate (including the likelihood and timing of consummation of the transactions contemplated thereby in accordance with its terms, including the prospects for obtaining required approvals and financing), contains terms that are more favorable to the Zynga’s stockholders than the transactions contemplated by the merger agreement, taking into account all terms and conditions of such transaction (including, as applicable, any changes to the terms of the merger agreement committed to by Take-Two to the Zynga board of directors in writing in response to such Zynga alternative acquisition proposal, any breakup fees, expense reimbursement provisions and financial terms).


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TABLE OF CONTENTS

 

SUMMARY

     1  
  The Parties to the Combination      1  
  The Combination and the Merger Agreement      2  
  Merger Consideration      2  
  Treatment of Zynga Equity Awards      2  
  Take-Two’s Reasons for the Combination and Recommendation of the Take-Two Board of Directors      3  
  Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors      3  
  Opinions of Take-Two’s Financial Advisors      4  
  Opinion of Zynga’s Financial Advisor      5  
  The Take-Two Special Meeting      5  
  The Zynga Special Meeting      7  
  Interests of Take-Two Directors and Executive Officers in the Combination      8  
  Interests of Zynga Directors and Executive Officers in the Combination      9  
  Certain Beneficial Owners of Take-Two Common Stock      9  
  Certain Beneficial Owners of Zynga Common Stock      10  
  Governance Matters After the Combination      10  
  Regulatory Approvals and Related Matters      10  
  Appraisal Rights      10  
  Conditions to the Completion of the Combination      11  
  Zynga Go-Shop Period      12  
  Zynga No-Shop Period      12  
  Take-Two No-Shop Period      12  
  Zynga Change in Recommendation      13  
  Take-Two Change in Recommendation      14  
  Termination of the Merger Agreement      15  
  Termination Fees      17  
  Voting Agreements      18  
  U.S. Federal Income Tax Consequences of the Combination      19  
  Comparison of Stockholders’ Rights      20  
  Listing of Take-Two Common Stock; Delisting and Deregistration of Zynga Common Stock      20  
  Risk Factors      20  

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

     21  
  Market Prices      21  
  Dividends      21  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     22  

RISK FACTORS

     24  
  Risks Relating to the Combination      24  
  Risks Relating to the Combined Company      32  
  Other Risk Factors Related to Take-Two and Zynga      37  

THE PARTIES TO THE COMBINATION

     38  
  Take-Two Interactive Software, Inc.      38  
  Zynga Inc.      38  
  Zebra MS I, Inc.      38  
  Zebra MS II, Inc.      38  

THE TAKE-TWO SPECIAL MEETING

     39  
  Date, Time and Place of the Take-Two Special Meeting      39  
  Matters to Be Considered at the Take-Two Special Meeting      39  
  Recommendation of the Take-Two Board of Directors      39  
  Record Date for the Take-Two Special Meeting and Voting Rights      40  
  Quorum; Abstentions and Broker Non-Votes      40  


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  Required Votes      41  
  Vote of Take-Two Directors and Executive Officers      42  
 

Methods of Voting

     42  
 

Virtually Attending the Take-Two Special Meeting

     43  
 

Revocability of Proxies

     44  
 

Proxy Solicitation Costs

     44  
 

Householding

     45  
 

Adjournments

     45  
 

Assistance

     46  

TAKE-TWO PROPOSAL 1: APPROVAL OF THE SHARE ISSUANCE

     47  

TAKE-TWO PROPOSAL 2: AMENDMENT TO THE TAKE-TWO CHARTER

     48  

TAKE-TWO PROPOSAL 3: ADJOURNMENT OF THE TAKE-TWO SPECIAL MEETING

     49  

THE ZYNGA SPECIAL MEETING

     50  
 

Date, Time and Place of the Zynga Special Meeting

     50  
 

Matters to Be Considered at the Zynga Special Meeting

     50  
 

Recommendation of the Zynga Board of Directors

     50  
 

Record Date for the Zynga Special Meeting and Voting Rights

     51  
 

Quorum; Abstentions and Broker Non-Votes

     51  
 

Required Votes

     52  
 

Vote of Zynga Directors and Executive Officers

     53  
 

Methods of Voting

     53  
 

Virtually Attending the Zynga Special Meeting

     54  
 

Revocability of Proxies

     55  
 

Proxy Solicitation Costs

     55  
 

Householding

     56  
 

Adjournments

     56  
 

Assistance

     57  

ZYNGA PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

     58  

ZYNGA PROPOSAL 2: ADVISORY NON-BINDING VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

     59  

ZYNGA PROPOSAL 3: ADJOURNMENT OF THE ZYNGA SPECIAL MEETING

     60  

THE COMBINATION

     61  
 

General

     61  
 

Merger Consideration

     61  
 

Background of the Combination

     62  
 

Take-Two’s Reasons for the Combination and Recommendation of the Take-Two Board of Directors

     74  
 

Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors

     79  
 

Opinions of Take-Two’s Financial Advisors

     84  
 

Financial Analyses of Take-Two’s Financial Advisors

     90  
 

Opinion of Zynga’s Financial Advisor

     96  
 

Take-Two Unaudited Prospective Financial Information

     106  
 

Zynga Unaudited Prospective Financial Information

     109  
 

Closing and Effective Time of the Combination

     114  
  Governance Matters After the Combination      115  
 

Regulatory Approvals and Related Matters

     115  
 

U.S. Federal Securities Law Consequences

     115  
 

Accounting Treatment

     116  
 

Exchange of Zynga Certificates

     116  
 

Listing

     117  

THE MERGER AGREEMENT

     118  
 

Terms of the Combination; Merger Consideration

     118  
 

Completion of the Combination

     119  


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Representations and Warranties

     119  
 

Conduct of Business

     122  
 

Go-Shop Period; Restrictions on Solicitations of Other Offers

     125  
 

Changes in Board Recommendations

     130  
 

Efforts to Obtain Required Stockholder Votes

     133  
 

Efforts to Complete the Combination

     134  
 

Governance Matters After the Combination

     135  
 

Employee Benefits Matters

     135  
 

Indemnification and Insurance

     136  
 

Treatment of Zynga Equity Awards

     137  
 

Other Covenants and Agreements

     137  
 

Conditions to Completion of the Combination

     140  
 

Termination of the Merger Agreement

     142  
 

Termination Fees and Expenses; Liability for Breach

     143  
 

Amendments, Extensions and Waivers

     145  
 

No Third Party Beneficiaries

     145  
 

Specific Performance

     145  

VOTING AGREEMENTS

     146  
 

Voting

     146  
 

Restrictions on Transfers

     147  
 

Termination

     147  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     148  

INTERESTS OF TAKE-TWO DIRECTORS AND EXECUTIVE OFFICERS IN THE COMBINATION

     171  

INTERESTS OF ZYNGA DIRECTORS AND EXECUTIVE OFFICERS IN THE COMBINATION

     172  

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE COMBINATION

     190  

COMPARISON OF STOCKHOLDERS’ RIGHTS

     193  

APPRAISAL RIGHTS

     205  

LEGAL MATTERS

     210  

EXPERTS

     210  

CERTAIN BENEFICIAL OWNERS OF TAKE-TWO COMMON STOCK

     211  
 

Security Ownership of Take-Two Directors and Executive Officers

     211  
 

Security Ownership of Other Beneficial Owners

     212  

CERTAIN BENEFICIAL OWNERS OF ZYNGA COMMON STOCK

     213  
 

Security Ownership of Take-Two Directors and Executive Officers

     213  
 

Security Ownership of Other Beneficial Owners

     215  

STOCKHOLDER PROPOSALS

     216  
 

Take-Two

     216  
 

Zynga

     216  

HOUSEHOLDING OF PROXY MATERIALS

     216  

WHERE YOU CAN FIND MORE INFORMATION

     218  

 

Annex A – Merger Agreement     A-1  
Annex B – Opinion of J.P. Morgan     B-1  
Annex C – Opinion of LionTree     C-1  
Annex D – Opinion of Goldman Sachs     D-1  
Annex E – Form of the proposed Take-Two charter amendment     E-1  
Annex F-1Take-Two voting agreement     F-1-1  
Annex F-2 – Form of Zynga voting agreement signed by Zynga’s executive officers and directors (other than Mark Pincus)     F-2-1  
Annex F-3 – Zynga voting agreement signed by Mark Pincus and certain of his respective affiliates     F-3-1  
Annex G – DGCL Section 262     G-1  


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QUESTIONS AND ANSWERS

The following questions and answers briefly address some questions that you, as a Take-Two stockholder or Zynga stockholder, may have regarding the combination and the other matters being considered at the Take-Two special meeting or the Zynga special meeting, as applicable. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. See “Summary” for a summary of important information regarding the merger agreement, the combination and the related transactions. Additional important information is contained in the annexes to, and the documents incorporated by reference in, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions in the section titled “Where You Can Find More Information.”

Why am I receiving this joint proxy statement/prospectus?

You are receiving this joint proxy statement/prospectus because Take-Two and Zynga have entered into the merger agreement, which provides for the combination of Take-Two and Zynga. Upon the terms and subject to the conditions set forth in the merger agreement, Take-Two will acquire all of the outstanding shares of Zynga through a merger of Merger Sub 1 with and into Zynga, with Zynga continuing as the surviving corporation in the merger and as a wholly owned subsidiary of Take-Two and, immediately following the effective time, the merger of Zynga with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation and as a wholly owned subsidiary of Take-Two. The merger agreement, which governs the terms and conditions of the combination, is attached as Annex A hereto.

Your vote is required in connection with the combination. Take-Two and Zynga are sending these materials to their respective stockholders to help them decide how to vote their shares with respect to the share issuance and the approval and adoption of the charter amendment, in the case of Take-Two, and the approval and adoption of the merger agreement and the combination, in the case of Zynga, and other important matters.

What matters am I being asked to vote on?

In order to complete the combination, among other things:

 

   

Take-Two stockholders must approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal; and

 

   

Zynga stockholders must approve the Zynga merger proposal.

Take-Two: Take-Two is holding the Take-Two special meeting to obtain approval of the Take-Two share issuance proposal and the Take-Two charter amendment proposal. At the Take-Two special meeting, Take-Two stockholders will also be asked to consider and vote on the Take-Two adjournment proposal.

Zynga: Zynga is holding the Zynga special meeting to obtain approval of the Zynga merger proposal. At the Zynga special meeting, Zynga stockholders will also be asked to consider and vote on the Zynga compensation proposal and the Zynga adjournment proposal.

Does my vote matter?

Yes, your vote is very important, regardless of the number of shares that you own. The combination cannot be completed unless the Take-Two share issuance proposal and the Take-Two charter amendment proposal are approved by Take-Two stockholders and the Zynga merger proposal is approved by Zynga stockholders.

The approval of the Take-Two adjournment proposal, the Zynga compensation proposal and the Zynga adjournment proposal are not required to complete the combination.

 

i


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When and where will each of the special meetings take place?

Take-Two: The Take-Two special meeting will be held virtually via a live, audio-only webcast on             , 2022, beginning at             , Eastern Time. There will not be a physical meeting location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Take-Two believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Take-Two board of directors and Take-Two management. Additionally, the virtual nature of the Take-Two special meeting is generally designed to enable participation of and access by more of Take-Two. Take-Two stockholders will be able to virtually attend and vote at the Take-Two special meeting by visiting             , which is referred to as the “Take-Two special meeting website.” In order to virtually attend and vote at the Take-Two special meeting, you will need the 16-digit control number located on your proxy card. If you hold your shares of Take-Two common stock in “street name,” you may virtually attend and vote at the Take-Two special meeting only if you obtain a specific control number from your brokerage firm, bank, dealer or other similar organization, trustee, or nominee giving you the right to vote such shares.

Zynga: The Zynga special meeting will be held virtually via live webcast on              , 2022, beginning at             , Pacific Time. There will not be a physical meeting location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Zynga believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Zynga board of directors and Zynga management. Additionally, the virtual nature of the Zynga special meeting is generally designed to enable participation of and access by more of Zynga stockholders while decreasing the cost of conducting the Zynga special meeting. Zynga stockholders will be able to virtually attend and vote at the Zynga special meeting by visiting             , which is referred to as the “Zynga special meeting website.” Zynga stockholders of record as of the Zynga record date can virtually attend and vote at the Zynga special meeting, by using the Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials. If you hold your shares of Zynga common stock in “street name,” you may virtually attend the Zynga special meeting as a guest. If you hold shares in “street name” through a bank, broker or other nominee and intend to vote your shares at the Zynga special meeting, you must request and obtain a valid “legal proxy” from your bank, broker or other nominee to attend the Zynga special meeting as a stockholder with American Stock Transfer & Trust Company LLC.

Even if you plan to virtually attend your respective company’s special meeting, Take-Two and Zynga recommend that you vote by proxy in advance as described below so that your vote will be counted if you later decide not to or become unable to virtually attend the applicable special meeting.

What will Zynga stockholders receive for their shares of Zynga common stock if the combination is completed?

If the merger is completed, 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 common stock, par value $0.01 per share, of Take-Two, which is referred to as “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. Take-Two stockholders will continue to own their existing shares of Take-Two common stock.

 

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As noted above, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. The exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. Based on the closing price of Take-Two common stock on Nasdaq of $         on                     , the latest practicable trading day prior to the date of the accompanying joint proxy statement/prospectus, the exchange ratio is              and the implied value of the consideration payable to Zynga stockholders in the combination was approximately $         per share of Zynga common stock. The Take-Two common stock price and the exchange ratio will not be determinable until the third trading day immediately preceding the closing date of the combination. The market price of shares of Take-Two common stock that Zynga stockholders receive at the time the combination is completed could be greater than, less than or the same as the market price of shares of Take-Two common stock on the date of this joint proxy statement/prospectus or on the date of the Take-Two special meeting and the Zynga special meeting. Accordingly, you should obtain current market quotations for Take-Two common stock and Zynga common stock before deciding how to vote on the Take-Two share issuance proposal, Take-Two charter amendment proposal and the Zynga merger proposal, as applicable. Take-Two common stock and Zynga common stock are traded on Nasdaq, under the symbols “TTWO” and “ZNGA,” respectively. Shares of Take-Two common stock will continue trading on Nasdaq under the symbol “TTWO” after completion of the combination. For more information regarding the merger consideration to be received by Zynga stockholders if the combination is completed, see the section titled “The Merger Agreement—Terms of the Combination; Merger Consideration.”

How does the Take-Two board of directors recommend that I vote at the Take-Two special meeting?

The Take-Two board of directors has unanimously determined and resolved that the combination, the share issuance and the charter amendment, 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 the Take-Two stockholders, and has approved the merger agreement and the transactions contemplated thereby, including the combination, the share issuance and the charter amendment. Accordingly, the Take-Two board of directors unanimously recommends that Take-Two stockholders vote “FOR” the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal and “FOR” the Take-Two adjournment proposal.

Other than with respect to continued service for, employment by and the right to continued indemnification by the combined company, as of the date of this joint proxy statement/prospectus, Take-Two directors and executive officers do not have interests in the combination that are different from, or in addition to, the interests of other Take-Two stockholders generally. See the section titled “Interests of Take-Two Directors and Executive Officers in the Combination.”

How does the Zynga board of directors recommend that I vote at the Zynga special meeting?

The Zynga board of directors has unanimously determined and resolved that the merger agreement and the combination are advisable and fair to, and in the best interests of, Zynga and the Zynga stockholders, and approved the merger agreement and the transactions contemplated thereby, including the combination. Accordingly, the Zynga board of directors unanimously recommends that Zynga stockholders vote “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal.

In considering the recommendations of the Zynga board of directors, Zynga stockholders should be aware that Zynga directors and executive officers have interests in the combination that are different from, or in addition to, their interests as Zynga stockholders generally. These interests may include, among others, the payment of severance benefits and acceleration of outstanding Zynga equity awards upon certain terminations of employment or service, Take-Two’s agreement to add two of Zynga’s current directors to the Take-Two board of

 

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directors as designated by Zynga and approved by Take-Two, and the combined company’s agreement to indemnify Zynga directors and executive officers against certain claims and liabilities. For a more complete description of these interests, see the section titled “Interests of Zynga Directors and Executive Officers in the Combination.”

Who is entitled to vote at each special meeting?

Take-Two

All holders of record of shares of Take-Two common stock who held shares at the close of business on                 , 2022, the Take-Two record date, are entitled to receive notice of, and to vote at, the Take-Two special meeting. Virtual attendance at the Take-Two special meeting via the Take-Two special meeting website is not required to vote. See below and the section titled “The Take-Two Special Meeting—Methods of Voting” for instructions on how to vote without virtually attending the Take-Two special meeting.

Zynga

All holders of record of shares of Zynga common stock who held shares at the close of business on                 , 2022, the Zynga record date, are entitled to receive notice of, and to vote at, the Zynga special meeting. Virtual attendance at the Zynga special meeting via the Zynga special meeting website is not required to vote. See below and the section titled “The Zynga Special Meeting—Methods of Voting” for instructions on how to vote without virtually attending the Zynga special meeting.

What is a proxy?

A proxy is a stockholder’s legal designation of another person to vote shares owned by such stockholder on their behalf. If you are a stockholder of record, you can vote by proxy over the internet or by mail by following the instructions provided in the enclosed proxy card, or, by telephone if you are Take-Two stockholder of record. If you hold shares beneficially through a broker, bank or other nominee in “street name,” you should follow the voting instructions provided by your broker, bank or other nominee.

How many votes do I have at each special meeting?

Take-Two

Each Take-Two stockholder is entitled to one vote on each proposal for each share of Take-Two common stock held of record at the close of business on the Take-Two record date. At the close of business on the Take-Two record date, there were              shares of Take-Two common stock outstanding.

Zynga

Each Zynga stockholder is entitled to one vote on each proposal for each share of Zynga common stock held of record at the close of business on the Zynga record date. At the close of business on the Zynga record date, there were              shares of Zynga common stock outstanding.

What constitutes a quorum for each special meeting?

A quorum is the minimum number of shares required to be represented, either through virtual attendance or through representation by proxy, to hold a valid meeting.

Take-Two

The holders of a majority of the issued and outstanding shares of Take-Two common stock entitled to vote at the Take-Two special meeting must be present in person or represented by proxy in order to constitute a quorum for

 

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the transaction of business at the Take-Two special meeting. Virtual attendance at the Take-Two special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Take-Two special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Take-Two special meeting. Since all of the proposals currently expected to be voted on at the Take-Two special meeting are considered non-routine matters, shares held in “street name” through a broker, bank or other nominee will not be counted as present for the purpose of determining the existence of a quorum if such broker, bank or other nominee does not have instructions to vote on any such proposals.

Zynga

The holders of a majority of the voting power of the shares of Zynga common stock entitled to vote at the Zynga special meeting must be present in person or represented by proxy in order to constitute a quorum for the transaction of business at the Zynga special meeting. Virtual attendance at the Zynga special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Zynga special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Zynga special meeting. Since all of the proposals currently expected to be voted on at the Zynga special meeting are considered non-routine matters, shares held in “street name” through a broker, bank or other nominee will not be counted as present for the purpose of determining the existence of a quorum if such broker, bank or other nominee does not have instructions to vote on any such proposals.

What happens if the combination is not completed?

If the Take-Two share issuance proposal or the Take-Two charter amendment proposal are not approved by Take-Two stockholders, if the Zynga merger proposal is not approved by Zynga stockholders or if the combination is not completed for any other reason, Zynga stockholders will not receive the merger consideration or any other consideration in connection with the combination, and their shares of Zynga common stock will remain outstanding.

If the combination is not completed, Zynga will remain an independent public company, the Zynga common stock will continue to be listed and traded on Nasdaq under the symbol “ZNGA” and Take-Two will not complete the share issuance contemplated by the merger agreement, regardless of whether the Take-Two share issuance proposal and the Take-Two charter amendment proposal have been approved by Take-Two stockholders.

If the merger agreement is terminated under specified circumstances, Take-Two or Zynga may be required to pay the other a termination fee of $550 million. If the merger agreement is terminated because Zynga’s stockholders fail to approve the Zynga merger proposal and Take-Two’s stockholders approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal, Zynga will be required to pay Take-Two an expense reimbursement of $50 million. If the merger agreement is terminated because Take-Two’s stockholders fail to approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal, and Zynga’s stockholders approve Zynga merger proposal, the Take-Two will be required to pay to Zynga an expense reimbursement of $50 million. See the section titled “The Merger Agreement—Termination Fees and Expenses; Liability for Breach.”

How can I vote my shares at my respective special meeting?

Take-Two

Shares held directly in your name as a Take-Two stockholder of record may be voted at the Take-Two special meeting via the Take-Two special meeting website at             . You will need the 16-digit control number included on your proxy card in order to access and vote via the Take-Two special meeting website as described in the section titled “The Take-Two Special Meeting—Virtually Attending the Take-Two Special Meeting.

 

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If you hold your shares through a stockbroker, nominee, fiduciary or other custodian you may also be able to vote through a program provided through Broadridge Financial Solutions (“Broadridge”) that offers Internet voting options. If your shares are held in an account at a brokerage firm or bank participating in the Broadridge program, you are offered the opportunity to elect to vote via the Internet. Votes submitted via the Internet through the Broadridge program must be received by 11:59 p.m. (Eastern Time) on             , 2022. See the section titled “The Take-Two Special Meeting—Virtually Attending the Take-Two Special Meeting.”

Zynga

Shares held directly in your name as a Zynga stockholder of record may be voted at the Zynga special meeting via the Zynga special meeting website at             . You will need Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials in order to access and vote via the Zynga special meeting website as described in the section titled “The Zynga Special Meeting—Virtually Attending the Zynga Special Meeting.”

If you hold your shares in “street name” through a bank, broker or other nominee, you may virtually attend the Zynga special meeting as a guest. If you hold shares in “street name” through a bank, broker or other nominee and intend to vote your shares online during the Zynga special meeting, you must request and obtain a valid “legal proxy” from your bank, broker or other nominee and register to attend the Zynga special as a stockholder with American Stock Transfer & Trust Company LLC. See the section titled “The Zynga Special Meeting—Virtually Attending the Zynga Special Meeting.”

Even if you plan to virtually attend your respective company’s special meeting via the applicable special meeting website, Take-Two and Zynga recommend that you vote by proxy in advance as described below so that your vote will be counted if you later decide not to or become unable to virtually attend the respective special meeting.

For additional information on virtually attending the special meetings, see the sections titled “The Take-Two Special Meeting” and “The Zynga Special Meeting.”

How can I vote my shares without virtually attending my company’s special meeting?

Whether you hold your shares directly as a stockholder of record of Take-Two or Zynga or beneficially in “street name,” you may direct your vote by proxy without virtually attending the Take-Two or Zynga special meeting, as applicable.

Take-Two

If you are a stockholder of record, you can vote by proxy:

 

   

by Internet 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on             , 2022 (have your proxy card in hand when you visit the website);

 

   

by telephone in accordance with the instructions on your proxy card, until 11:59 p.m. Eastern Time on             , 2022 (have your proxy card in hand when you call); or

 

   

by completing and mailing your proxy card in accordance with the instructions provided on the proxy card.

If you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee. If you hold your shares through a stockbroker, nominee, fiduciary or other custodian you may also be able to vote through a program provided through Broadridge Financial Solutions (“Broadridge”) that offers Internet voting options. If your shares are held in an account at a brokerage firm or bank participating

 

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in the Broadridge program, you are offered the opportunity to elect to vote via the Internet. Votes submitted via the Internet through the Broadridge program must be received by 11:59 p.m. (Eastern Time) on              , 2022.

For additional information on voting procedures, see the section titled “The Take-Two Special Meeting.”

Zynga

If you are a stockholder of record, you can vote by proxy:

 

   

by Internet by completing an electronic proxy card at www.voteproxy.com. You will be asked to provide your Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials. Your vote must be received by 11:59 p.m. Eastern Time on             , 2022; or

 

   

by completing and mailing your proxy card in accordance with the instructions provided on the proxy card.

If you hold shares beneficially through a broker, bank or other nominee in “street name,” you should follow the voting instructions provided by your broker, bank or other nominee in order to vote by proxy.

For additional information on voting procedures, see the section titled “The Zynga Special Meeting.”

What is a “broker non-vote”?

Under Nasdaq rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All of the proposals currently expected to be voted on at the Take-Two special meeting and Zynga special meeting are “non-routine” matters.

A “broker non-vote” occurs on a proposal when (i) a broker, bank or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the broker, bank or other nominee with such instructions. Because all of the proposals currently expected to be voted on at the Take-Two special meeting and Zynga special meeting are non-routine matters for which brokers do not have discretionary authority to vote, Take-Two and Zynga do not expect there to be any broker non-votes at the Take-Two or Zynga special meetings.

What stockholder vote is required for the approval of each proposal at the Take-Two special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Take-Two special meeting?

Take-Two Proposal 1: 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 have the same effect as a vote

 

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AGAINST” the Take-Two share issuance proposal for purposes of the requirement that 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.

Take-Two Proposal 2: Take-Two Charter Amendment Proposal

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two charter amendment proposal requires the affirmative vote of the holders of Take-Two common stock representing at least a majority of the outstanding shares of Take-Two common stock entitled to vote thereon. If you are a Take-Two stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote with respect to the Take-Two charter amendment proposal, or abstain from voting, it will have the same effect as a vote “AGAINST” the Take-Two charter amendment proposal.

Take-Two Proposal 3: Take-Two Adjournment Proposal

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two adjournment proposal requires 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. 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 adjournment 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 have the same effect as a vote “AGAINST” the Take-Two adjournment proposal. 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 adjournment proposal, it will have the same effect as a vote “AGAINST” the Take-Two adjournment proposal.

What stockholder vote is required for the approval of each Zynga proposal at the Zynga special meeting? What will happen if I fail to vote or abstain from voting on each Zynga proposal at the Zynga special meeting?

Zynga Proposal 1: Zynga Merger Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga merger proposal requires the affirmative vote 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 you are a Zynga stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote with respect to the Zynga merger proposal or abstain from voting, it will have the same effect as a vote “AGAINST” the Zynga merger proposal.

Zynga Proposal 2: Zynga Compensation Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga compensation proposal requires the affirmative vote of a majority of the voting power of the of Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga compensation proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares

 

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present or represented by proxy to vote on the Zynga compensation proposal will have the same effect as a vote “AGAINST” the Zynga compensation proposal. In addition, if a Zynga 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 Zynga compensation proposal, it will have the same effect as a vote “AGAINST” the Zynga compensation proposal.

Zynga Proposal 3: Zynga Adjournment Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga adjournment proposal requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga adjournment 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 Zynga adjournment proposal will have the same effect as a vote “AGAINST” the Zynga adjournment proposal. In addition, if a Zynga 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 Zynga adjournment proposal, it will have the same effect as a vote “AGAINST” the Zynga adjournment proposal.

Why am I being asked to consider and vote on a proposal to approve, by non-binding advisory vote, the merger-related compensation for Zynga named executive officers, which is referred to as the Zynga compensation proposal? What happens if Zynga stockholders do not approve, by non-binding advisory vote, the Zynga compensation proposal?

Under SEC rules, Zynga is required to seek a non-binding advisory vote of its stockholders relating to the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the combination (also known as “golden parachute” compensation).

Because the vote on the proposal to approve the Zynga compensation proposal is advisory in nature, the outcome of the vote will not be binding upon Zynga or the combined company. Accordingly, the merger-related compensation, which is described under “Interests of Zynga Directors and Executive Officers in the Combination,” may be paid to Zynga’s named executive officers even if Zynga stockholders do not approve the Zynga compensation proposal.

What if I hold shares of both Take-Two common stock and Zynga common stock?

If you are both a Take-Two stockholder and a Zynga stockholder, you will receive two separate packages of proxy materials. A vote cast as a Take-Two stockholder will not count as a vote cast as a Zynga stockholder, and a vote cast as a Zynga stockholder will not count as a vote cast as a Take-Two stockholder. Therefore, please follow the instructions received with each set of materials you receive in order to submit separate proxies for your shares of Take-Two common stock and your shares of Zynga common stock.

What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name”?

If your shares of Take-Two common stock or Zynga common stock are registered directly in your name with the transfer agent of Take-Two or Zynga, respectively, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote directly at the applicable special meeting. You may also grant a proxy directly to Take-Two or Zynga, as applicable, or to a third party to vote your shares at the applicable special meeting.

 

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If your shares of Take-Two common stock or Zynga common stock are held by brokerage firm, bank, dealer or other similar organization, trustee, or nominee, you are considered the beneficial owner of shares held in “street name.” Your brokerage firm, bank, dealer or other similar organization, trustee, or nominee will send you, as the beneficial owner, a package describing the procedures for voting your shares. You should follow the instructions provided by your brokerage firm, bank, dealer or other similar organization, trustee, or nominee to vote your shares.

In order to virtually attend and vote at the Take-Two special meeting via the Take-Two special meeting website you should follow the voting instructions provided by your bank, broker or other nominee. If you hold your shares of Take-Two common stock through a stockbroker, nominee, fiduciary or other custodian you may also be able to vote through a program provided through Broadridge that offers Internet voting options. If your shares of Take-Two common stock are held in an account at a brokerage firm or bank participating in the Broadridge program, you are offered the opportunity to elect to vote via the Internet. Votes submitted via the Internet through the Broadridge program must be received by 11:59 p.m. Eastern Time on             , 2022.

If you hold your shares of Zynga common stock in “street name” through a bank, broker or other nominee, you may virtually attend the Zynga special meeting as a guest. If you hold shares in “street name” through a bank, broker or other nominee and intend to vote your shares online during the Zynga special meeting, you must request and obtain a valid “legal proxy” from your bank, broker or other nominee and register to attend the Zynga special meeting as a stockholder with American Stock Transfer & Trust Company LLC.

If my shares of Take-Two common stock or Zynga common stock are held in “street name” by my brokerage firm, bank, dealer or other similar organization, trustee, or nominee, will my brokerage firm, bank, dealer or other similar organization, trustee, or nominee automatically vote those shares for me?

No. Your bank, broker or other nominee will only be permitted to vote your shares of Take-Two common stock or Zynga common stock, as applicable, at the applicable special meeting if you instruct your bank, broker or other nominee. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares. Banks, brokers and other nominees who hold shares of Take-Two common stock or Zynga common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are prohibited from exercising their voting discretion with respect to non-routine matters, which include all of the proposals currently expected to be voted on at the Take-Two special meeting and Zynga special meeting. As a result, absent specific instructions from the beneficial owner of such shares, banks, brokers and other nominees are not empowered to vote such shares.

What should I do if I receive more than one set of voting materials for the same special meeting?

If you hold shares of Take-Two common stock or Zynga common stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of Take-Two common stock or Zynga common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same special meeting.

Record Holders. For shares held directly, please vote by proxy over the internet or, if you are a Take-Two stockholder, by telephone, using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to ensure that all of your shares of Take-Two common stock or Zynga common stock are voted.

Shares Held in Street Name. For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by bank, broker or other nominee to submit a proxy or vote your shares.

 

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If a stockholder gives a proxy, how are the shares of Take-Two common stock or Zynga common stock voted?

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of Take-Two common stock or Zynga common stock, as applicable, in the way that you indicate. For each item before the Take-Two or Zynga special meeting, as applicable, you may specify whether your shares of Take-Two common stock or Zynga common stock, as applicable, should be voted “for” or “against,” or abstain from voting.

For more information regarding how your shares will be voted if you properly sign, date and return a proxy card, but do not indicate how your Take-Two common stock or Zynga common stock, as applicable, should be voted, see below “—How will my shares be voted if I return a blank proxy?

How will my shares be voted if I return a blank proxy?

Take-Two

If you sign, date and return your proxy and do not indicate how you want your shares of Take-Two common stock to be voted, then your shares of Take-Two common stock will be voted in accordance with the recommendation of the Take-Two board of directors: “FOR” the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal and “FOR” the Take-Two adjournment proposal.

Zynga

If you sign, date and return your proxy and do not indicate how you want your shares of Zynga common stock to be voted, then your shares of Zynga common stock will be voted in accordance with the recommendation of the Zynga board of directors: “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal.

Can I change my vote after I have submitted my proxy?

Any Take-Two stockholder or Zynga stockholder giving a proxy has the right to revoke the proxy and change their vote before the proxy is voted at the applicable special meeting by doing any of the following:

 

   

subsequently submitting a new proxy for the applicable special meeting that is received by the deadline specified on the accompanying proxy card;

 

   

giving written notice of your revocation to Take-Two’s Corporate Secretary or Zynga’s Corporate Secretary, as applicable; or

 

   

virtually attending and voting at the applicable special meeting via the applicable special meeting website. Note that a proxy will not be revoked if you attend, but do not vote at, the applicable special meeting.

Execution or revocation of a proxy will not in any way affect your right to virtually attend and vote at the applicable special meeting via the applicable special meeting website. See the sections titled “The Take-Two Special Meeting—Revocability of Proxies” and “The Zynga Special Meeting—Revocability of Proxies.”

If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?

If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.

 

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Where can I find the voting results of the special meetings?

The preliminary voting results for each special meeting are expected to be announced at that special meeting. In addition, within four business days following certification of the final voting results, each of Take-Two and Zynga will file the final voting results of its respective special meeting (or, if the final voting results have not yet been certified, the preliminary results) with the SEC on a Current Report on Form 8-K.

Do Zynga stockholders have dissenters’ or appraisal rights?

Under the DGCL, holders of Zynga common stock who deliver to Zynga a written demand for appraisal before the vote on the adoption of the merger agreement at the Zynga special meeting and who do not vote for the adoption and approval of the merger agreement and to approve the combination have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the combination is completed and if certain conditions are met, but only if they comply with all requirements of Delaware law, as described under “Appraisal Rights” below, beginning on page 205 which detailed description is qualified by reference to the full text of Section 262 of the DGCL as attached as Annex G hereto. This appraisal amount could be more than, the same as, or less than the amount a Zynga stockholder would be entitled to receive under the merger agreement. Any holder of Zynga common stock intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to Zynga prior to the vote on the adoption and approval of the merger agreement and the transactions contemplated thereunder, not vote or otherwise submit a proxy in favor of adoption and approval of the merger agreement and the transactions contemplated thereunder and not submit a letter of transmittal. Failure to follow exactly the procedures specified under Delaware law may result in the loss of appraisal rights. See the section titled “Appraisal Rights. Information about how Zynga stockholders may vote on the proposals being considered in connection with the combination can be found in the section titled “The Zynga Special Meeting.”

The stockholders of Take-Two are not entitled to appraisal rights in connection with the combination under Delaware law.

Are there any risks that I should consider in deciding whether to vote for the approval of the Take-Two share issuance proposal, the Take-Two charter amendment proposal or the Zynga merger proposal?

Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors.” You also should read and carefully consider the risk factors relating to Take-Two and Zynga that are contained in the documents that are incorporated by reference in this joint proxy statement/prospectus.

What happens if I sell my shares of Take-Two common stock or Zynga common stock after the respective record date but before the respective special meeting?

The Take-Two record date is earlier than the date of the Take-Two special meeting, and the Zynga record date is earlier than the date of the Zynga special meeting. If you sell or otherwise transfer your shares of Take-Two common stock or Zynga common stock after the applicable record date but before the applicable special meeting, you will, unless special arrangements are made, retain your right to vote at the applicable special meeting.

Who will solicit and pay the cost of soliciting proxies?

Take-Two has engaged MacKenzie Partners, Inc., which is referred to as “MacKenzie Partners,” to assist in the solicitation of proxies for the Take-Two special meeting. Take-Two estimates that it will pay MacKenzie Partners a fee of approximately $125,000, plus reimbursement for certain out-of-pocket fees and expenses. Take-Two has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

 

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Zynga has engaged D.F. King & Co., Inc., which is referred to as “D.F. King,” to assist in the solicitation of proxies for the Zynga special meeting. Zynga estimates that it will pay D.F. King a fee of approximately $50,000, plus reimbursement for certain out-of-pocket fees and expenses. Zynga has agreed to indemnify D.F. King against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Take-Two and Zynga also may reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Take-Two common stock and Zynga common stock, respectively. Take-Two and Zynga directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

When is the combination expected to be completed?

Subject to the satisfaction or waiver of the closing conditions described in the section titled “The Merger Agreement—Conditions to the Completion of the Combination,” including approval of the Take-Two share issuance proposal and the Take-Two charter amendment proposal by Take-Two stockholders and approval of the Zynga merger proposal by Zynga stockholders, the combination is currently expected to be completed in the first quarter of Take-Two’s fiscal year 2023, ending June 30, 2022. However, neither Take-Two nor Zynga can predict the actual date on which the combination will be completed, or if the combination will be completed at all, because completion of the combination is subject to conditions and factors beyond the control of both companies. Take-Two and Zynga hope to complete the combination as soon as reasonably practicable.

What respective equity stakes will Take-Two stockholders and Zynga stockholders hold in the combined company immediately following the combination?

As noted above, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. Based on the closing price of Take-Two common stock on Nasdaq of $         and on the number of shares of Take-Two common stock and Zynga common stock outstanding on             , the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the combination, the current Take-Two stockholders are expected to own approximately     % of the outstanding shares of Take-Two common stock and former Zynga stockholders are expected to own approximately     % of the outstanding shares of Take-Two common stock. The relative ownership interests of Take-Two stockholders and former Zynga stockholders in the combined company immediately following the combination will depend on the exchange ratio and the number of shares of Take-Two common stock and Zynga common stock issued and outstanding immediately prior to the combination.

If I am a Zynga stockholder, how will I receive the merger consideration to which I am entitled?

If, at the effective time, you hold your shares of Zynga common stock in book-entry form, whether through The Depository Trust Company, which is referred to as “DTC,” or otherwise, you will not be required to take any specific actions to exchange your shares of Zynga common stock for shares of Take-Two common stock and cash consideration. Such shares will, following the effective time, be automatically exchanged for shares of Take-Two common stock (in book-entry form), cash consideration and cash in lieu of any fractional shares of Take-Two common stock to which you are entitled. If, at the effective time, you instead hold your shares of Zynga common stock in certificated form, then, after receiving the proper documentation from you following the effective time, the exchange agent will deliver to you the shares of Take-Two common stock (in book-entry form), cash consideration and cash in lieu of any fractional shares of Take-Two common stock to which you are entitled. See the section titled “The Combination—Exchange of Zynga Certificates.”

 

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What are the material U.S. federal income tax consequences of the combination to U.S. holders of shares of Zynga common stock?

Take-Two and Zynga intend for the combination to be treated as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to Take-Two’s obligation to complete the combination that Take-Two receive an opinion from Willkie Farr & Gallagher LLP (“Willkie”), counsel to Take-Two, to the effect that the combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to Zynga’s obligation to complete the combination that Zynga receive an opinion from Wilson Sonsini Goodrich & Rosati, counsel to Zynga, to the effect that the combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. Assuming the receipt and accuracy of these opinions, a holder of shares of Zynga common stock will generally recognize gain (but not loss) for U.S. federal income tax purposes in an amount equal to the lesser of (i) the amount of gain realized (i.e., the excess, if any, of the sum of the amount of cash and the fair market value, as of the effective time of the merger, of the Take-Two shares received in the combination over that stockholder’s adjusted tax basis in its Zynga shares surrendered) and (ii) the amount of cash received in the combination.

You should read the section titled “U.S. Federal Income Tax Consequences of the Combination” beginning on page 190 for a more complete discussion of the U.S. federal income tax consequences of the combination. Tax matters can be complicated, and the tax consequences of the combination to you will depend on your particular situation. You should consult your tax advisor to determine the tax consequences of the combination to you.

What should I do now?

You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes. Then, you may vote by proxy over the internet or by telephone, if you are a Take-Two stockholder, using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, so that your shares will be voted in accordance with your instructions.

How can I find more information about Take-Two and Zynga?

You can find more information about Take-Two and Zynga from various sources described in the section titled “Where You Can Find More Information.”

Whom do I call if I have questions about the special meetings or the combination?

If you have questions about the special meetings or the combination, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact your company’s proxy solicitor:

 

If you are a Take-Two stockholder:

 

LOGO

 

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
(800) 322-2885
proxy@mackenziepartners.com

  

If you are a Zynga stockholder:

 

LOGO

 

D.F. King & Co. Inc.
48 Wall Street, 22nd Floor

New York, New York 10005
Stockholders may call toll free: (800) 714-3310

Banks and Brokers may call: (212) 269-5550

ZNGA@dfking.com

 

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SUMMARY

For your convenience, provided below is a brief summary of certain information contained in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a Take-Two stockholder or Zynga stockholder. To understand the combination fully and for a more complete description of the terms of the combination, you should read carefully this entire joint proxy statement/prospectus, its annexes and the other documents to which you are referred. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions under “Where You Can Find More Information.”

The Parties to the Combination (Page 38)

Take-Two Interactive Software, Inc.

Headquartered in New York City, Take-Two is a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. Take-Two develops and publishes products principally through Rockstar Games, 2K, Private Division, and T2 Mobile Games. Take-Two’s products are designed for console systems, personal computers, and mobile, including smartphones and tablets, and are delivered through physical retail, digital download, online platforms, and cloud streaming services. Take-Two’s common stock is publicly traded on Nasdaq under the symbol “TTWO.” For more corporate and product information please visit Take-Two’s website at http://www.take2games.com. Take-Two’s principal executive offices are located at 110 West 44th Street, New York, New York 10036, and its telephone number is (646) 536-2842. 

Zynga Inc.

Zynga is a global leader in interactive entertainment with a mission to connect the world through games. With massive global reach in more than 175 countries and regions, Zynga has a diverse portfolio of popular game franchises that have been downloaded more than four billion times on mobile including CSR Racing, Empires & Puzzles, FarmVille, Golf Rival, Hair Challenge, Harry Potter: Puzzles & Spells, High Heels!, Merge Dragons!, Merge Magic!, Toon Blast, Toy Blast, Words With Friends and Zynga Poker. With Chartboost, a leading mobile advertising and monetization platform, Zynga is an industry-leading next-generation platform with the ability to optimize programmatic advertising and yields at scale. Founded in 2007, Zynga is headquartered in California with locations in North America, Europe and Asia. For more information, visit www.zynga.com or follow Zynga on Twitter, Instagram, Facebook or the Zynga blog. Zynga’s principal executive offices are located at 699 Eighth Street, San Francisco, CA 94103, and its telephone number is (855) 449-9642.

Zebra MS I, Inc. and Zebra MS II, Inc.

Zebra MS I, Inc. and Zebra MS II, Inc. were each formed by Take-Two for the sole purpose of effecting the combination. Zebra MS I, Inc. and Zebra MS II, Inc. have not conducted any business and have no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. By operation of the merger, Merger Sub 1 will be merged with and into Zynga, with Zynga continuing as the surviving corporation and as a wholly owned subsidiary of Take-Two, and the separate existence of Merger Sub 1 will cease. Immediately after the merger, by operation of the subsequent merger, the surviving corporation in the merger will be merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company and as a wholly owned subsidiary of Take-Two, and Merger Sub 2 will succeed to all of the property, rights, privileges, powers, franchises, debts, liabilities of the surviving corporation. Merger Sub 1’s and Merger Sub 2’s principal executive offices are located at 110 West 44th Street, New York, New York 10036, and their telephone number is (646) 536-2842.

 

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The Combination and the Merger Agreement (Pages 61 and 118)

The terms and conditions of the combination are contained in the merger agreement, a copy of which is attached as Annex A hereto. Take-Two and Zynga encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the combination.

The merger agreement provides that, subject to the terms and conditions of the merger agreement, Merger Sub 1 will be merged with and into Zynga, with Zynga continuing as the surviving corporation, and as a wholly owned subsidiary of Take-Two. Immediately after the merger, the surviving corporation will be merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company, and as a wholly owned subsidiary of Take-Two.

Merger Consideration (Page 118)

At the effective time, each share of Zynga common stock that is outstanding immediately prior to the effective time will be converted into the right to receive (i) a number of shares of common stock, par value $0.01 per share, of Take-Two, which is referred to as “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. Take-Two stockholders will continue to own their existing shares of Take-Two common stock.

As noted above, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. The exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. The Take-Two common stock price and the exchange ratio will not be determinable until the third trading day immediately preceding the closing date of the combination.

Treatment of Zynga Equity Awards (Page 137)

With respect to Zynga’s equity awards, the merger agreement provides that, at the effective time:

 

   

each option to purchase Zynga common stock granted under any Zynga employee benefit plan, which is referred to as a “Zynga option,” that is outstanding and unexercised as of immediately prior to the effective time, whether or not then exercisable or vested, will be assumed by Take-Two and automatically converted into an option exercisable for shares of Take-Two common stock under the Take-Two equity plan, with the new number of shares underlying the options and exercise price determined after application of the equity award exchange ratio in accordance with the merger agreement. The “equity award exchange ratio” will equal the sum of

 

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(i) the exchange ratio, and (ii) the quotient (rounded to four decimal places) obtained by dividing the cash consideration per share by the Take-Two common stock price (calculated as described under the section titled “The Merger Agreement”). As of such conversion, each converted option shall be subject to the same terms and conditions (including vesting and exercisability terms) applicable to the corresponding Zynga option immediately prior to the effective time except as otherwise provided in the merger agreement;

 

   

each Zynga restricted stock unit whose vesting is not conditioned in whole or in part on the satisfaction of performance criteria (including any awards previously granted subject to performance goals for which performance has been achieved, and remain subject to vesting based only on continued service), which is referred to as a “Zynga RSU Award,” that is outstanding immediately prior to the effective time, whether vested or unvested, will be assumed by Take-Two and automatically converted into a Take-Two restricted share unit award with respect to shares of Take-Two common stock under the Take-Two equity plan on the same terms and conditions as applied to the Zynga restricted stock unit as of immediately prior to the effective time, except as otherwise provided in the merger agreement, with the new number of shares underlying such award determined after application of the equity award exchange ratio in accordance with the merger agreement; and

 

   

each Zynga restricted stock unit whose vesting is conditioned in whole or in part on the satisfaction of performance criteria, which is referred to as a “Zynga PSU Award,” that is outstanding immediately prior to the effective time, whether vested or unvested (and provided that any such award that as of immediately prior to the effective time no longer is subject to performance criteria shall be subject to the treatment described in the immediately preceding paragraph above for Zynga RSU awards), will be assumed by Take-Two and automatically be converted into a Take-Two restricted share unit award with respect to shares of Take-Two common stock under the Take-Two equity plan on the same terms and conditions as applied to the Zynga performance share unit as of immediately prior to the effective time, with the new number of shares underlying such award determined after application of the equity award exchange ratio in accordance with the merger agreement.

For more information, see the section titled “The Merger Agreement—Treatment of Zynga Equity Awards.”

Take-Two’s Reasons for the Combination and Recommendation of the Take-Two Board of Directors (Page 74)

The Take-Two board of directors unanimously recommends that you vote “FOR” the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal and “FOR” the Take-Two adjournment proposal. For a description of factors considered by the Take-Two board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the combination, the share issuance and the charter amendment, and additional information on the recommendation of the Take-Two board of directors, see the section titled “The Combination—Take-Twos Reasons for the Combination and Recommendation of the Take-Two Board of Directors.”

Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors (Page 79)

The Zynga board of directors unanimously recommends that you vote “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal. For a description of factors considered by the Zynga board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the combination, and additional information on the recommendation of the Zynga board of directors, see the section titled “The Combination—Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors.”

 

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Opinions of Take-Two’s Financial Advisors

Opinion of J.P. Morgan Securities LLC (Page 84; Annex B)

Pursuant to an engagement letter, Take-Two retained J.P. Morgan as its financial advisor in connection with the proposed combination.

At the meeting of the Take-Two board of directors on January 9, 2022, J.P. Morgan rendered its oral opinion to the Take-Two board of directors, subsequently confirmed by delivery of J.P. Morgan’s written opinion to the Take-Two board of directors, dated January 9, 2022, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the merger consideration to be paid by Take-Two in the proposed combination was fair, from a financial point of view, to Take-Two.

The full text of the written opinion of J.P. Morgan dated January 9, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Take-Two’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was provided to the Take-Two board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed combination, was directed only to the merger consideration to be paid in the combination and did not address any other aspect of the combination. J.P. Morgan expressed no opinion as to the fairness of the merger consideration to the holders of any class of securities, creditors or other constituencies of Take-Two or as to the underlying decision by Take-Two to engage in the proposed combination. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. J.P. Morgan’s opinion does not constitute a recommendation to any stockholder of Take-Two as to how such stockholder should vote with respect to the proposed combination or any other matter.

The full text of the written opinion of J.P. Morgan, dated January 9, 2022, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/prospectus as Annex B. The summary of J.P. Morgan’s opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of J.P. Morgan’s written opinion. J.P. Morgan provided advisory services and its opinion for the information and assistance of the Take-Two board of directors in connection with its consideration of the transaction contemplated by the merger agreement. The J.P. Morgan opinion is not a recommendation as to how any holder of Take-Two common stock should vote with respect to the transaction contemplated by the merger agreement or any other matter.

For additional information, see the section titled “The Combination—Opinions of Take-Two’s Financial Advisors—Opinion of J.P. Morgan Securities, LLC” and the full text of the written opinion of J.P. Morgan attached as Annex B to this joint proxy statement/prospectus.

Opinion of LionTree Advisors LLC (Page 87; Annex C)

The Take-Two board of directors retained LionTree to act as a financial advisor to the Take-Two board of directors in connection with the combination. On January 9, 2022 at a meeting of the Take-Two board of directors held to evaluate the combination, LionTree rendered its oral opinion to the Take-Two board of directors (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated January 9, 2022 addressed to the Take-Two Board of directors) that, as of such date, the merger consideration to be paid by Take-Two pursuant to the merger agreement was fair, from a financial point of view, to Take-Two, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion.

 

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LionTree’s opinion was provided to the Take-Two board of directors and only addressed the fairness, from a financial point of view, of the merger consideration to be paid by Take-Two pursuant to the merger agreement. The summary of LionTree’s opinion in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this joint proxy statement/prospectus and incorporated herein by reference, and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this joint proxy statement/prospectus constitute a recommendation to any holder of Take-Two common stock as to how such stockholder should vote or act on any matter relating to the merger or any other matter.

The full text of the written opinion of LionTree, dated January 9, 2022, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy statement/prospectus as Annex C. The summary of LionTree’s opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of LionTree’s written opinion. LionTree provided advisory services and its opinion for the information and assistance of the Take-Two board of directors in connection with its consideration of the transaction contemplated by the merger agreement. The LionTree opinion is not a recommendation as to how any holder of Take-Two common stock should vote with respect to the transaction contemplated by the merger agreement or any other matter.

For additional information, see the section titled “The Combination—Opinions of Take-Two’s Financial Advisors—Opinion of LionTree Advisors, LLC” and the full text of the written opinion of LionTree attached as Annex C to this joint proxy statement/prospectus.

Opinion of Zynga’s Financial Advisor

Opinion of Goldman Sachs & Co. LLC (Page 96; Annex D)

At a meeting of the Zynga board of directors held on January 9, 2022, Goldman Sachs rendered its oral opinion, subsequently confirmed by delivery of its written opinion, dated January 9, 2022, to the Zynga board of directors that, as of the date of the written opinion and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be paid to the holders (other than Take-Two and its affiliates) of shares of Zynga common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated January 9, 2022, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex D. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Zynga board of directors in connection with its consideration of the transactions contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to how any holder of Zynga common stock should vote with respect to such transactions or any other matter.

For additional information, see the section titled “The Combination—Opinion of Zynga’s Financial Advisor” and the full text of the written opinion of Goldman Sachs attached as Annex D to this joint proxy statement/prospectus.

The Take-Two Special Meeting (Page 39)

The Take-Two special meeting will be held in a virtual meeting format via live, audio-only webcast on             , 2022, beginning at                 , Eastern Time. Take-Two stockholders will be able to virtually attend and vote at the Take-Two special meeting by visiting the Take-Two special meeting website at                 .

 

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The purposes of the Take-Two special meeting are as follows:

 

   

Take-Two Proposal 1: Approval of the Share Issuance. To consider and vote on the Take-Two share issuance proposal;

 

   

Take-Two Proposal 2: Approval of the Charter Amendment. To consider and vote on the Take-Two charter amendment proposal; and

 

   

Take-Two Proposal 3: Adjournment of the Take-Two Special Meeting. To consider and vote on the Take-Two adjournment proposal.

Approval of the Take-Two share issuance proposal and the Take-Two charter amendment proposal by Take-Two stockholders are conditions to the combination. Approval of the Take-Two adjournment proposal is not a condition to the obligation of either Take-Two or Zynga to complete the combination.

Only holders of record of shares of Take-Two common stock outstanding at the close of business on                     , 2022, the Take-Two record date, are entitled to notice of, and to vote at, the Take-Two special meeting or any adjournment or postponement thereof. Each Take-Two stockholder is entitled to one vote on each proposal for each share of Take-Two common stock held of record at the close of business on the Take-Two record date.

A quorum of Take-Two stockholders is necessary to conduct business at the Take-Two special meeting. The presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Take-Two common stock entitled to vote at the Take-Two special meeting will constitute a quorum. Virtual attendance at the Take-Two special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Take-Two special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Take-Two special meeting. Since all of the proposals for consideration at the Take-Two special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Take-Two stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals brought before the Take-Two special meeting.

Take-Two Proposal 1: 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 have the same effect as a vote “AGAINST” the Take-Two share issuance proposal for 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.

 

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Take-Two Proposal 2: Take-Two Charter Amendment Proposal

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two charter amendment proposal requires the affirmative vote of the holders of Take-Two common stock representing at least a majority of the outstanding shares of Take-Two common stock entitled to vote thereon. If you are a Take-Two stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote with respect to the Take-Two charter amendment proposal, or abstain from voting, it will have the same effect as a vote “AGAINST” the Take-Two charter amendment proposal.

Take-Two Proposal 3: Take-Two Adjournment Proposal

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two adjournment proposal requires 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. 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 adjournment proposal. An abstention or other failure of any shares present or represented by proxy to vote on the Take-Two share issuance proposal will have the same effect as a vote “AGAINST” the Take-Two adjournment proposal, provided that a quorum is otherwise present 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 adjournment proposal, it will have the same effect as a vote “AGAINST” the Take-Two adjournment proposal.

The Zynga Special Meeting (Page 50)

The Zynga special meeting will be held virtually via live webcast on                 , 2022, beginning at                 , Pacific Time. Zynga stockholders will be able to virtually attend and vote at the Zynga special meeting by visiting the Zynga special meeting website at                 .

The purposes of the Zynga special meeting are as follows:

 

   

Zynga Proposal 1: Adoption of the Merger Agreement. To consider and vote on the Zynga merger proposal;

 

   

Zynga Proposal 2: Approval, on an Advisory Non-Binding Basis, of Certain Merger-Related Compensatory Arrangements with Zynga Named Executive Officers. To consider and vote on the Zynga compensation proposal; and

 

   

Zynga Proposal 3: Adjournment of the Zynga Special Meeting. To consider and vote on the Zynga adjournment proposal.

Approval of the Zynga merger proposal by Zynga stockholders is a condition to the combination. Approval of the advisory Zynga compensation proposal and the Zynga adjournment proposal are not conditions to the obligation of either Take-Two or Zynga to complete the combination.

Only holders of record of shares of Zynga common stock outstanding at the close of business on                 , 2022, the Zynga record date, are entitled to notice of, and to vote at, the Zynga special meeting or any adjournment or postponement thereof. Each Zynga stockholder is entitled to one vote on each proposal for each share of Zynga common stock held of record at the close of business on the Zynga record date.

A quorum of Zynga stockholders is necessary to conduct business at the Zynga special meeting. The presence in person or by proxy of the holders of a majority of the voting power of the issued and outstanding shares of Zynga

 

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common stock entitled to vote at the Zynga special meeting will constitute a quorum. Virtual attendance at the Zynga special meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Zynga special meeting. Abstentions will count as votes present and entitled to vote for the purpose of determining the presence of a quorum for the transaction of business at the Zynga special meeting. Since all of the proposals for consideration at the Zynga special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Zynga stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals brought before the Zynga special meeting.

Zynga Proposal 1: Zynga Merger Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga merger proposal requires the affirmative vote 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 you are a Zynga stockholder and fail to vote, fail to instruct your bank, broker or other nominee to vote with respect to the Zynga merger proposal, or abstain from voting, it will have the same effect as a vote “AGAINST” the Zynga merger proposal.

Zynga Proposal 2: Zynga Compensation Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga compensation proposal requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga compensation 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 Zynga compensation proposal will have the same effect as a vote “AGAINST” the Zynga compensation proposal. In addition, if a Zynga 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 Zynga compensation proposal, it will have the same effect as a vote “AGAINST” the Zynga compensation proposal.

Zynga Proposal 3: Zynga Adjournment Proposal

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga adjournment proposal requires the affirmative vote of a majority of voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga adjournment 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 Zynga adjournment proposal will have the same effect as a vote “AGAINST” the Zynga adjournment proposal. In addition, if a Zynga 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 Zynga adjournment proposal, it will have the same effect as a vote “AGAINST” the Zynga adjournment proposal.

Interests of Take-Two Directors and Executive Officers in the Combination (Page 171)

Other than with respect to continued service for, employment by and/or the right to continued indemnification by the combined company, as of the date of this joint proxy statement/prospectus, Take-Two directors and executive

 

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officers do not have interests in the combination that are different from, or in addition to, the interests of other Take-Two stockholders generally. See the section titled “Interests of Take-Two Directors and Executive Officers in the Combination.”

Interests of Zynga Directors and Executive Officers in the Combination (Page 172)

In considering the recommendations of the Zynga board of directors, Zynga stockholders should be aware that Zynga directors and executive officers may have interests in the combination, including financial interests, which may be different from, or in addition to, the interests of Zynga stockholders generally. The Zynga board of directors was aware of and considered these interests, among other matters, in reaching its determination that the combination is fair to and in the best interests of Zynga and its stockholders, approving and declaring advisable the merger agreement and the transactions contemplated thereby, including the combination, and recommending that Zynga stockholders approve the Zynga merger proposal. These interests are discussed in more detail in the section titled “Interests of Zynga Directors and Executive Officers in the Combination.

The benefits and financial interests that Zynga’s directors and executive officers may become eligible to receive as a result of their interests in the combination include:

 

   

Zynga equity awards, including Zynga options, Zynga RSUs and Zynga PSUs held by Zynga executive officers will be assumed by Take-Two and converted into Take-Two equity awards under the Take-Two equity plan, the number and estimated value of which are provided in the section titled “Interests of Zynga Directors and Executive Officers in the Combination;”

 

   

each of Zynga’s current executive officers has entered into an offer letter with Zynga and/or is a participant in the Zynga Inc. Change in Control Severance Benefit Plan, which, among other things, provide for certain benefits in the event of a termination of employment under qualifying circumstances in connection with a change in control of Zynga;

 

   

the merger agreement provides that the directors and executive officers of Zynga and its subsidiaries will have the right to indemnification and continued coverage under directors’ and officers’ liability insurance policies following the combination; and

 

   

Take-Two has agreed to appoint, on or prior to the effective time, two members of the Zynga board of directors, selected by Zynga and approved by Take-Two, to the Take-Two of board of directors.

For an estimate of the value of the benefits and financial interests that Zynga’s named executive officers may become eligible to receive as a result of their interests in the combination, assuming, among other things, that the combination was completed on May 31, 2022 and each such named executive officer experienced a qualifying termination of employment immediately thereafter, see the section titled “Interests of Zynga Directors and Executive Officers in the Combination–Quantification of Payments and Benefits to Zynga Named Executive Officers–Golden Parachute Compensation.

Certain Beneficial Owners of Take-Two Common Stock (Page 211)

At the close of business on                , the latest practicable date prior to the date of this joint proxy statement/ prospectus, Take-Two directors and executive officers and their affiliates, as a group, owned and were entitled to vote approximately                % of the shares of Take-Two common stock, including the shares covered by the voting agreement described below and entered into by and among Take-Two’s executive officers and directors (and certain of their respective affiliates), solely in their capacity as stockholders of Take-Two (the “Take-Two voting agreement”). For more information regarding the Take-Two voting agreement, see the section titled “Voting Agreements.”

 

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Pursuant to the voting agreement, Take-Two currently expects that all Take-Two directors and executive officers will vote their shares “FOR” the Take-Two share issuance proposal, “FOR” the Take-two charter amendment proposal and “FOR” the Take-Two adjournment proposal. For more information regarding the security ownership of Take-Two directors and executive officers, see the section titled “Certain Beneficial Owners of Take-Two Common Stock.”

Certain Beneficial Owners of Zynga Common Stock (Page 213)

At the close of business on                , the latest practicable date prior to the date of this joint proxy statement/ prospectus, Zynga directors and executive officers and their affiliates, as a group, owned and were entitled to vote approximately                % of the shares of Zynga common stock, including the shares covered by the voting agreements described below and entered into by and among Zynga’s executive officers and directors (and certain of their respective affiliates), solely in their capacity as stockholders of Zynga (the “Zynga voting agreements”). For more information regarding the Zynga voting agreements, see the section titled “Voting Agreements.”

Zynga currently expects that all Zynga directors and executive officers will vote their shares “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal. For more information regarding the security ownership of Zynga directors and executive officers, see the section titled “Certain Beneficial Owners of Zynga Common Stock.”

Governance Matters After the Combination (Page 135)

Pursuant to the merger agreement, Take-Two has agreed to appoint, on or prior to the effective time, two members of the Zynga board of directors, selected by Zynga and approved by Take-Two, to the Take-Two of board of directors. The two members of the Zynga board of directors selected by Zynga for appointment to the Take-Two board of directors pursuant to this provision of the merger agreement are Ellen Siminoff and William “Bing” Gordon. The appointment of Ms. Siminoff and Mr. Gordon remain subject to the review and approval by Take-Two’s Corporate Governance Committee and Board of Directors prior to the effective time. For more information, see the section titled “The Combination—Governance Matters After the Combination.”

Regulatory Approvals and Related Matters (Page 115)

The obligations of Take-Two and Zynga to consummate the combination are subject to, among other conditions, the expiration or earlier termination of any waiting period (and any extension thereof) under the HSR Act and the consent, waiver, authorization or approval of the applicable antitrust regulatory authority in certain specified non-U.S. jurisdictions. Take-Two and Zynga filed the notifications required under the HSR Act with the Premerger Notification Office of the Federal Trade Commission and the Antitrust Division of the Department of Justice on January 24, 2022. The applicable waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on February 23, 2022.

Under the merger agreement, each of Take-Two and Zynga has agreed to use their respective reasonable best efforts, subject to certain limitations, to take, or cause to be taken, all actions necessary to complete the combination and make effective the other contemplated as soon as practicable after the date of the merger agreement, including to receive all required regulatory approvals so as to complete the combination and the other contemplated transactions expeditiously (but in no event later than January 9, 2023). For more information, see the section titled “The Combination—Regulatory Approvals and Related Matters.”

Appraisal Rights (Page 205)

Under the DGCL, holders of Zynga common stock who deliver to Zynga a written demand for appraisal before the vote on the adoption of the merger agreement at the Zynga special meeting and who do not vote for the

 

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adoption and approval of the merger agreement and to approve the combination have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the combination is completed and if certain conditions are met, but only if they comply with all requirements of Delaware law, as described under “Appraisal Rights” below, beginning on page 205 which detailed description is qualified by reference to the full text of Section 262 of the DGCL as attached as Annex G hereto. This appraisal amount could be more than, the same as, or less than the amount a Zynga stockholder would be entitled to receive under the merger agreement. Any holder of Zynga common stock intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to Zynga prior to the vote on the adoption and approval of the merger agreement and the transactions contemplated thereunder, not vote or otherwise submit a proxy in favor of adoption and approval of the merger agreement and the transactions contemplated thereunder and not submit a letter of transmittal. Failure to follow exactly the procedures specified under Delaware law may result in the loss of appraisal rights. See the section titled “Appraisal Rights.” Information about how Zynga stockholders may vote on the proposals being considered in connection with the Combination can be found in the section titled “The Zynga Special Meeting.”

The stockholders of Take-Two are not entitled to appraisal of their shares or dissenters’ rights with respect to the merger in connection with the combination under Delaware law.

Conditions to the Completion of the Combination (Page 140)

The obligations of each of Take-Two and Zynga to complete the combination are subject to the satisfaction or waiver (to the extent permitted by applicable legal requirements), at or prior to the completion of the combination, of each of the following conditions:

 

   

the registration statement of which this joint proxy statement/prospectus is a part being declared effective in accordance with the provisions of the Securities Act, no stop order suspending its effectiveness being issued by the SEC and in effect and there being no proceedings for that purpose having been initiated;

 

   

shares of Take-Two common stock to be issued in the combination having been approved for listing (subject to official notice of issuance) on the Nasdaq;

 

   

the merger agreement being duly adopted by the required Zynga stockholder vote;

 

   

the Take-Two share issuance proposal and the Take-Two charter amendment each being duly approved by the required Take-Two stockholder vote;

 

   

the expiration or earlier termination of any applicable waiting period (and any extension thereof) under the HSR Act;

 

   

the antitrust approvals that are required pursuant to the laws of certain specified non-U.S. jurisdictions; and

 

   

the absence of any statute, regulation, order or injunction having the effect of preventing or materially impairing the consummation of the merger.

In addition, each party’s obligation to complete the combination is subject to, among other things, the accuracy of certain representations and warranties of the other party and the compliance by such other party with certain of its covenants, in each case, subject to the materiality standards set forth in the merger agreement, and the absence of the occurrence of any material adverse effect on the other party.

Neither Take-Two nor Zynga can be certain when, or if, the conditions to the combination will be satisfied or waived, or that the combination will be completed.

 

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Zynga Go-Shop Period (Page 125)

Under the merger agreement, until the expiration of the go-shop period at 11:59 p.m. (New York time) on February 24, 2022, which is referred to as the “go-shop period”, Zynga, its subsidiaries and affiliates, and its and their respective representatives, had the right to, among other things, (i) solicit, initiate, propose, induce the making or submission of, encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Zynga alternative acquisition proposal, including by (a) providing any nonpublic information relating to Zynga, its subsidiaries or their respective businesses, properties or assets and (b) providing access in connection therewith to Zynga personnel, in each case, to any third party that has executed a Zynga acceptable confidentiality agreement (as defined under “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”); and (ii) enter into or continue discussions with third parties in connection therewith, and cooperate with or assist or participate in, or facilitate in any way, any inquiries, offers, proposals, discussions or negotiations or any effort or attempt to make any Zynga alternative acquisition proposal or other proposals that could reasonably be expected to lead to a Zynga alternative acquisition proposal, including by granting a waiver, amendment or release under any pre-existing “standstill,” “confidentiality” or other similar provision to the extent necessary to allow for a Zynga alternative acquisition proposal or amendment to a Zynga alternative acquisition proposal to be made to Zynga or the Zynga board of directors. If as a result of its activities during the go-shop period, Zynga provided to any third parties access in writing to nonpublic information that was not previously made available to Take-Two, Zynga is required to provide such information to Take-Two promptly following such provision to any third parties.

Zynga No-Shop Period (Page 125)

Under the merger agreement, commencing at 12:01 a.m. (New York time) on February 25, 2022, which is referred to as the “Zynga no-shop period start date”, until the earlier of the effective time and the date, if any, on which the merger agreement is terminated, subject to certain exceptions, Zynga may not, and must cause its subsidiaries and its directors and officers not to, and must not authorize or permit its other representatives to, subject to limited exceptions set forth in the merger agreement:

 

   

solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Zynga alternative acquisition proposal;

 

   

continue, enter into, engage in or otherwise participate in any discussions or negotiations with any person regarding any Zynga alternative acquisition proposal; or

 

   

grant any waiver, amendment or release of any third party under any standstill or confidentiality provision in connection with the preceding bullets.

In the merger agreement, Zynga agreed that at the Zynga no-shop period start date, Zynga would, and cause its subsidiaries and its directors and officers to, and not permit or authorize its other representatives to fail to, immediately cease any and all existing activities, discussions or negotiations with any parties previously conducted with respect to any Zynga alternative acquisition proposal, other than with any excluded party (as defined under “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”).

Take-Two No-Shop Period (Page 126)

Under the merger agreement, commencing on the date of the merger agreement and until the earlier of the effective time and the date, if any, on which the merger agreement is terminated, subject to certain exceptions,

 

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Take-Two may not, and must cause its subsidiaries and its directors and officers not to, and must not authorize or permit its other representatives to, subject to limited exceptions set forth in the merger agreement:

 

   

solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Take-Two alternative acquisition proposal;

 

   

continue, enter into, engage in or otherwise participate in any discussions or negotiations with any person regarding any Take-Two alternative acquisition proposal; or

 

   

grant any waiver, amendment or release of any third party under any standstill or confidentiality provision in connection with the preceding bullets.

In the merger agreement, Take-Two agreed that at the Take-Two no-shop period start date, Take-Two would, and cause its subsidiaries and its directors and officers to, and not permit or authorize its other representatives to fail to, immediately cease any and all existing activities, discussions or negotiations with any parties previously conducted with respect to any Take-Two alternative acquisition proposal.

Zynga Change in Recommendation (Page 130)

Under the merger agreement, except as described below, the Zynga board of directors may not:

 

   

withdraw (or qualify, amend or modify in any manner adverse to Take-Two), or propose publicly to withdraw (or qualify, amend or modify in any manner adverse to Take-Two), its recommendation that the stockholders of Zynga vote in favor of the approval of the combination;

 

   

approve, recommend or declare advisable any Zynga alternative acquisition proposal;

 

   

fail to recommend against acceptance of a tender offer or exchange offer that is a Zynga alternative acquisition proposal; or

 

   

refuse to affirm publicly the Zynga recommendation following a reasonable written request by Take-Two to provide such reaffirmation, provided, that the Zynga board of directors will not be required to affirm the recommendation made more than once per Zynga alternative acquisition proposal or material modification of such Zynga alternative acquisition proposal (any such action described in the preceding bullets, a “Zynga change of recommendation”).

At any time prior to obtaining the required Zynga vote, the Zynga board of directors may, subject to advance notice and negotiation obligations in favor of Take-Two set forth in the merger agreement:

 

   

effect a Zynga change of recommendation following a bona fide written Zynga alternative acquisition proposal that did not result from or arise out of a material breach by Zynga of the “no-shop” provisions under the merger agreement and which the Zynga board of directors determines in good faith, in consultation with its financial advisors and outside legal counsel, is a Zynga superior proposal, and that the failure to take such action would be inconsistent with its fiduciary duties under applicable law;

 

   

following receipt of a bona fide written Zynga alternative acquisition proposal which the Zynga board of directors determines in good faith, in consultation with its financial advisors and outside legal counsel, is a Zynga superior proposal, terminate the merger agreement for the purpose of entering into an alternative acquisition agreement with respect to such Zynga superior proposal, if the Zynga board of directors has determined in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law and, concurrently with entering into such alternative acquisition agreement, Zynga terminates the merger agreement and pays the applicable termination fee, as described in the section entitled “The Merger Agreement—Termination Fees and Expenses; Liability for Breach”; or

 

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effect a Zynga change of recommendation in response to a Zynga intervening event if the Zynga board of directors determines in good faith, in consultation with its financial advisors and outside legal counsel, that the failure to effect a Zynga change of recommendation would be inconsistent with its fiduciary duties under applicable law.

Under the merger agreement, the following actions shall not (in and of themselves) constitute a Zynga change of recommendation, or otherwise constitute a basis for Take-Two, Merger Sub 1 or Merger Sub 2 to terminate the merger agreement:

 

   

a determination by the Zynga board of directors that a Zynga alternative acquisition proposal constitutes, or would reasonably be expected to result in a Zynga superior proposal;

 

   

the delivery, in and of itself, of a notice of a Zynga change of recommendation to Take-Two;

 

   

any public disclosure of the actions described in the preceding bullets required by applicable law, so long as any such disclosure includes an express reaffirmation of the Zynga recommendation; or

 

   

or the making, in and of itself, of a customary “stop, look and listen” communication to Zynga’s stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act.

The merger agreement does not restrict Zynga or the Zynga board of directors from complying with its disclosure obligations under applicable law or rules and policies of the NASDAQ with regard to any Zynga alternative acquisition proposal, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act (or any similar communication to stockholders).

Take-Two Change in Recommendation (Page 131)

Under the merger agreement, except as described below, the Take-Two board of directors may not:

 

   

withdraw (or qualify, amend or modify in any manner adverse to Zynga), or propose publicly to withdraw (or qualify, amend or modify in any manner adverse to Zynga), its recommendation that the stockholders of Take-Two vote in favor of the approval of the combination;

 

   

approve, recommend or declare advisable any Take-Two alternative acquisition proposal;

 

   

fail to recommend against acceptance of a tender offer or exchange offer that is a Take-Two alternative acquisition proposal; or

 

   

refuse to affirm publicly the Take-Two Recommendation following a reasonable written request by Zynga to provide such reaffirmation, provided, that the Take-Two board of directors will not be required to affirm the recommendation made more than once per Take-Two alternative acquisition proposal or material modification of such Take-Two alternative acquisition proposal (any such action described in the preceding bullets, a “Take-Two change of recommendation”).

At any time prior to obtaining the required Take-Two vote, the Take-Two board of directors may, subject to advance notice and negotiation obligations in favor of Take-Two set forth in the merger agreement:

 

   

effect a Take-Two change of recommendation following a bona fide written Take-Two alternative acquisition proposal that did not result from or arise out of a material breach by Take-Two of the “no-shop” provisions under the merger agreement and which the Take-Two board of directors determines in good faith, in consultation with its financial advisors and outside legal counsel, is a Take-Two superior proposal, and that the failure to take such action would be inconsistent with its fiduciary duties under applicable law; or

 

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effect a Take-Two change of recommendation in response to a Take-Two intervening event if the Take-Two board of directors determines in good faith, in consultation with its financial advisors and outside legal counsel, that the failure to effect a Take-Two change of recommendation would be inconsistent with its fiduciary duties under applicable law.

Under the merger agreement, the following actions shall not (in and of themselves) constitute a Take-Two change of recommendation, or otherwise constitute a basis for Zynga to terminate the merger agreement:

 

   

a determination by the Take-Two board of directors that a Take-Two alternative acquisition proposal constitutes, or would reasonably be expected to result in a Take-Two superior proposal;

 

   

the delivery, in and of itself, of a notice of a Take-Two change of recommendation to Zynga;

 

   

any public disclosure of the actions described in the preceding bullets required by applicable law, so long as any such disclosure includes an express reaffirmation of the Take-Two recommendation; or

 

   

the making, in and of itself, of a customary “stop, look and listen” communication to Take-Two’s stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act.

The merger agreement does not restrict Take-Two or the Take-Two board of directors from complying with its disclosure obligations under applicable law or rules and policies of the NASDAQ with regard to any Take-Two alternative acquisition proposal, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act (or any similar communication to stockholders).

Termination of the Merger Agreement (Page 142)

The merger agreement may be terminated and the combination abandoned at any time prior to the effective time, and, except as described below, whether before or after the receipt of the required stockholder approvals, under the following circumstances:

 

   

by mutual written consent of Zynga and Take-Two;

 

   

by either Zynga or Take-Two:

 

   

if the combination is not consummated before the twelve (12) month anniversary of the date the merger agreement, which is January 9, 2023 and referred to as the “end date”; provided, however, that this right to terminate the merger agreement will not be available to any party whose breach of any provision of the merger agreement has been the primary cause of the failure to close by the end date;

 

   

if any governmental entity issues a final and non-appealable order, decree or ruling or takes any other action that has the effect of permanently restraining, enjoining or otherwise prohibiting or making illegal the consummation of the combination or any other transaction contemplated by the merger agreement, provided, that the party seeking to terminate pursuant to this right used its reasonable best efforts to remove such restraint or prohibition; and that this right to terminate the merger agreement will not be available to any party whose breach of any provision of the merger agreement results in the imposition of such order, decree or ruling or the failure of such order, decree or ruling to be resisted, resolved or lifted;

 

   

if the required Zynga vote and/or the required Take-Two vote (each as defined under “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”) is not obtained; provided, however, that this right to terminate the merger agreement will not be available to any party whose breach of certain provisions of the merger agreement relating to the preparation and filing of this joint proxy statement/prospectus resulted in the failure of the applicable requisite vote to be obtained;

 

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by Take-Two:

 

   

prior to the Zynga special meeting, if (i) there shall have been a Zynga change of recommendation or the Zynga board of directors shall have approved or recommended a Zynga superior proposal (or the Zynga board of directors resolves to do any of the foregoing), (ii) Zynga or any of its subsidiaries shall have entered into any definitive acquisition agreement, merger agreement or similar definitive agreement to consummate a Zynga alternative acquisition proposal, whether or not permitted by the merger agreement or (iii) Zynga is in intentional breach of any of its material obligations under the merger agreement regarding third-party acquisition proposals as described under the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”;

 

   

upon a breach of any representation, warranty, covenant or agreement on the part of Zynga contained in the merger agreement such that the relevant conditions to Take-Two’s obligations to complete the combination would not be satisfied and that either (i) the breach is not reasonably capable of being cured or (ii) if such breach is reasonably capable of being cured, such breach has not been cured prior to the earlier of (a) thirty (30) days following notice of such breach or (b) the end date. However, Take-Two does not have this right to terminate the merger agreement if it is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement;

 

   

by Zynga:

 

   

prior to receipt of the required Zynga vote, if the Zynga board of directors shall have authorized Zynga to enter into an alternative acquisition agreement with respect to a Zynga superior proposal; provided that, substantially concurrently with and as a condition to such termination, Zynga enters into such alternative acquisition agreement and pays (or causes to be paid) to Take-Two the termination fee (and reimbursement for expenses of enforcing the right to receive the termination fee);

 

   

upon a breach of any representation, warranty, covenant or agreement on the part of Take-Two, Merger Sub 1 or Merger Sub 2 contained in the merger agreement such that the relevant conditions to Zynga’s obligations to complete the combination would not be satisfied and that either (i) the breach is not reasonably capable of being cured or (ii) if such breach is reasonably capable of being cured, such breach has not been cured prior to the earlier of (a) thirty (30) days following notice of such breach or (b) the end date; provided, however, that Zynga does not have this right to terminate the merger agreement if it is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement; or

 

   

prior to the Take-Two special meeting, if (i) there shall have been a Take-Two change of recommendation or the Take-Two board of directors shall have approved or recommended a Take-Two superior proposal (or the Take-Two board of directors resolves to do any of the foregoing), (ii) Take-Two or any of its subsidiaries shall have entered into any definitive acquisition agreement, merger agreement or similar definitive agreement to consummate a Take-Two alternative acquisition proposal, whether or not permitted by the merger agreement or (iii) Take-Two shall be in intentional breach of its obligations under the merger agreement regarding third-party acquisition proposals as described under the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers.

 

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Termination Fees (Page 143)

Zynga will be obligated to pay to Take-Two a termination fee of $550,000,000 (and reimbursement for expenses of enforcing the right to receive the termination fee) if:

 

   

Take-Two terminates the merger agreement because, prior to the Zynga special meeting, (i) there shall have been a Zynga change of recommendation or the Zynga board of directors shall have approved or recommended a Zynga superior proposal (or the Zynga board of directors resolves to do any of the foregoing), (ii) Zynga or any of its subsidiaries shall have entered into any definitive acquisition agreement, merger agreement or similar definitive agreement to consummate a Zynga alternative acquisition proposal, whether or not permitted by the merger agreement or (iii) Zynga is in intentional breach of any of its obligations under the merger agreement regarding third-party acquisition proposals as described under the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”;

 

   

(i) Zynga or Take-Two terminates the merger agreement because the required Zynga vote was not obtained, (ii) at or prior to the time of the Zynga special meeting there is publicly disclosed or announced a bona fide written Zynga alternative acquisition proposal that has not been publicly withdrawn at least five business days prior to the time of the Zynga special meeting and (iii) within twelve (12) months following the termination of the merger agreement, Zynga consummates a Zynga alternative acquisition proposal, or enters into a definitive agreement to consummate a Zynga alternative acquisition proposal and the transaction contemplated thereby is subsequently consummated (except that, for this purpose, each reference to “more than 20%” in the definition of “Zynga alternative acquisition proposal” is deemed to be a reference to “more than 50%”);

 

   

(i) Take-Two terminates the merger agreement (a) because of a failure of the closing of the combination to occur on or before the end date and such failure was primarily attributable to a breach of any provision of the merger agreement by Zynga (other than Zynga’s obligations to cooperate with Take-Two’s efforts to obtain financing in connection with the combination) or (b) because of a breach by Zynga of a representation, warranty or covenant contained in the merger agreement such that the relevant conditions to Take-Two’s obligations to complete the combination would not be satisfied, (ii) at or prior to the time of such termination there shall have been publicly disclosed or announced a bona fide written Zynga alternative acquisition proposal that has not been publicly withdrawn at least five business days prior to the time of such termination and (iii) within twelve (12) months following the termination of the merger agreement, Zynga consummates a Zynga alternative acquisition proposal, or enters into a definitive agreement to consummate a Zynga alternative acquisition proposal and the transaction contemplated thereby is subsequently consummated (except that, for this purpose, each reference to “more than 20%” in the definition of “Zynga alternative acquisition proposal” is deemed to be a reference to “more than 50%”); or

 

   

Zynga terminates the merger agreement because, prior to the receipt of the required Zynga vote and on or after the Zynga no-shop period start date, the Zynga board of directors authorizes Zynga to enter into a definitive acquisition agreement with respect to a Zynga superior proposal.

Additionally, if Zynga had terminated the merger agreement because prior to the receipt of the required Zynga vote and prior to the Zynga no-shop period start date, the Zynga board of directors had authorized Zynga to enter into a definitive acquisition agreement with respect to a Zynga superior proposal, Zynga would have been required to pay to Take-Two a termination fee of $400,000,000 (and reimbursement for expenses of enforcing the right to receive such fee).

 

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Take-Two will be obligated to pay to Zynga the termination fee of $550,000,000 (and reimbursement for expenses of enforcing the right to receive the termination fee) if:

 

   

Zynga terminates the merger agreement because, prior to the Take-Two special meeting, (i) the Take-Two board of directors withdraws, or modifies or amends in an adverse manner, its approval or recommendation of the merger agreement or the combination, (ii) Take-Two or any of its subsidiaries enter into any definitive agreement to consummate a Take-Two alternative acquisition proposal or (iii) Take-Two is in intentional breach of its obligations under the merger agreement regarding third-party acquisition proposals as described under the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers”;

 

   

(i) Zynga or Take-Two terminates the merger agreement because the required Take-Two vote was not obtained, (ii) at or prior to the time of the Take-Two special meeting there is publicly disclosed or announced a bona fide written Take-Two alternative acquisition proposal that has not been publicly withdrawn at least five business days prior to the time of the Take-Two special meeting and (iii) within twelve (12) months following the termination of the merger agreement, Take-Two consummates a Take-Two alternative acquisition proposal, or enters into a definitive agreement to consummate a Take-Two alternative acquisition proposal and the transaction contemplated thereby is subsequently consummated (except that, for this purpose, each reference to “more than 20%” in the definition of “Take-Two alternative acquisition proposal” is deemed to be a reference to “more than 50%”); or

 

   

(i) Zynga terminates the merger agreement (a) because of a failure of the closing of the combination to occur on or before the end date and such failure was primarily attributable to a breach of any provision of the merger agreement by Take-Two or (b) because of a breach by Take-Two, Merger Sub 1 or Merger Sub 2 of a representation, warranty or covenant contained in the merger agreement the relevant conditions to Zynga’s obligations to complete the combination would not be satisfied, (ii) at or prior to the time of such termination there shall have been publicly disclosed or announced a bona fide written Take-Two alternative acquisition proposal that has not been publicly withdrawn at least five business days prior to the time of such termination and (iii) within twelve (12) months following the termination of merger agreement, Take-Two consummates a Take-two alternative acquisition proposal, or enters into a definitive agreement to consummate a Take-Two alternative acquisition proposal and the transaction contemplated thereby is subsequently consummated (except that, for this purpose, each reference to “more than 20%” in the definition of “Take-Two alternative acquisition proposal” is deemed to be a reference to “more than 50%”).

Additionally, if Zynga or Take-Two terminates the merger agreement because the required Take-Two vote was not obtained and at the time of such termination the required Zynga vote was already obtained, the Take-Two shall pay to Zynga an expense reimbursement of $50,000,000. Further, if Zynga or Take-Two terminates the merger agreement because the required Zynga vote was not obtained and at the time of such termination the required Take-Two vote was already obtained, Zynga shall pay to Take-Two an expense reimbursement of $50,000,000.

Voting Agreements (Page 146)

Concurrently with the execution of the merger agreement, on January 9, 2022, Take-Two and Zynga entered into (i) a voting agreement (the “Take-Two voting agreement”) with Mr. Zelnick, certain of Mr. Zelnick’s affiliates, Lainie Goldstein, Daniel Emerson, J Moses, Michael Sheresky, Michael Dornemann, Susan Tolson, LaVerne Srinivasan, Paul Viera, certain of Mr. Viera’s affiliates, and Roland Hernandez and (ii) voting agreements (the “Zynga voting agreements”) with Amy Rawlings, Bernard Kim, Carol G. Mills, Ellen F. Siminoff, Frank Gibeau, James Gerard Griffin, Janice M. Roberts, Jeff Ryan, Louis J. Lavigne, Jr., Mark Pincus, Noel B. Watson, Phuong Y. Phillips, Regina E. Dugan, and William “Bing” Gordon, and certain of their respective affiliates, in each case

 

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in such person’s capacity as a stockholder of Take-Two or Zynga, as applicable. The Take-Two voting agreement and the Zynga voting agreements are each referred to as a “voting agreement” and each Take-Two or Zynga stockholder party thereto, as applicable, if referred to as “supporting stockholder.”

Each Take-Two supporting stockholder agreed that from the date of the voting agreement until the date that the voting agreement terminates, such supporting stockholder will vote or cause to be voted all shares of Take-Two common stock that he, she or it beneficially owns, among other things:

 

   

against any action or agreement that has or would reasonably be likely to result in Take-Two’s representations, warranties, and obligations not being fulfilled;

 

   

against any Take-Two alternative acquisition proposal;

 

   

against any amendment to Take-Two’s organization documents if such amendment would reasonably be expected to prevent or materially delay the consummation of the combination; and

 

   

against any other action or agreement that is intended, or would reasonably be expected, to materially impede, interfere with or delay the combination or the transactions contemplated by the merger agreement.

Each Zynga supporting stockholder agreed that from the date of the voting agreement until the date that the voting agreement terminates, such supporting stockholder will vote or cause to be voted all shares of Zynga common stock that he, she or it beneficially owns, among other things:

 

   

in favor of the adoption of the merger agreement;

 

   

against any action or agreement that has or would reasonably be likely to result in Zynga’s representations, warranties, and obligations not being fulfilled;

 

   

against any Zynga alternative acquisition proposal;

 

   

against any amendments to the Zynga organizational documents if such amendment would reasonably be expected to prevent or materially delay the consummation of the combination; and

 

   

against any other action or agreement that is intended, or would reasonably be expected, to materially impede, interfere with or delay the combination or the transactions contemplated by the merger agreement.

As of                , 2022, the Take-Two supporting stockholders subject to the Take-Two voting agreements beneficially owned in the aggregate approximately    % of the outstanding shares of Take-Two common stock, and the Zynga supporting stockholders subject to the Zynga voting agreement beneficially owned in the aggregate approximately    % of the outstanding shares of Zynga common stock. For more information, see the section titled “Voting Agreements” and Annexes F-1 through F-3 to this joint proxy statement/prospectus.

U.S. Federal Income Tax Consequences of the Combination (Page 190)

Take-Two and Zynga intend for the combination to be treated as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to Take-Two’s obligation to complete the combination that Take-Two receive an opinion from Willkie, counsel to Take-Two, to the effect that the combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to Zynga’s obligation to complete the combination that Zynga receive an opinion from Wilson Sonsini Goodrich & Rosati, counsel to Zynga, to the effect that the combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. Assuming the receipt and accuracy of these opinions, a holder of shares of Zynga common stock will generally recognize gain (but not loss) for U.S. federal income tax purposes in an amount

 

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equal to the lesser of (i) the amount of gain realized (i.e., the excess, if any, of the sum of the amount of cash and the fair market value, as of the effective time of the merger, of the Take-Two shares received in the combination over that stockholder’s adjusted tax basis in its Zynga shares surrendered) and (ii) the amount of cash received in the combination.

You should read the section titled “U.S. Federal Income Tax Consequences of the Combination” beginning on page 190 for a more complete discussion of the U.S. federal income tax consequences of the combination. Tax matters can be complicated, and the tax consequences of the combination to you will depend on your particular situation. You should consult your tax advisor to determine the tax consequences to you of the combination.

Comparison of Stockholders’ Rights (Page 193)

Upon completion of the combination, Zynga stockholders receiving shares of Take-Two common stock will become Take-Two stockholders. The rights of Take-Two stockholders will be governed by the DGCL and the Take-Two charter and Take-Two bylaws in effect at the effective time. As Take-Two and Zynga are both Delaware corporations, the rights of Take-Two stockholders and Zynga stockholders are not materially different. However, there are certain differences in the rights of Take-Two stockholders under the Take-Two charter and Take-Two bylaws and of Zynga stockholders under the Zynga charter and Zynga bylaws. See the section titled “Comparison of Stockholders’ Rights.”

Listing of Take-Two Common Stock; Delisting and Deregistration of Zynga Common Stock (Page 117)

It is a condition to the combination that the shares of Take-Two common stock to be issued to Zynga stockholders in the combination be approved for listing on Nasdaq, subject to official notice of issuance. If the combination is completed, Zynga common stock will be delisted from Nasdaq and deregistered under the Exchange Act, following which Zynga will no longer be required to file periodic reports with the SEC with respect to Zynga common stock.

Risk Factors (Page 24)

In evaluating the merger agreement, the combination, the share issuance and the charter amendment you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section titled “Risk Factors.”

 

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Market Prices

Take-Two common stock is listed on the Nasdaq under the symbol “TTWO” and Zynga common stock is listed on Nasdaq under the symbol “ZNGA.”

The following table sets forth the closing sale price per share of Take-Two common stock and Zynga common stock reported on Nasdaq, respectively, as of (1) January 7, 2022, the trading day before the public announcement of the execution of the merger agreement and (2)             , 2022, the latest practicable trading date before the date of this joint proxy statement/prospectus. The table also shows the estimated implied value of the per share merger consideration for each share of Zynga common stock as of the same two days. This implied per share value was calculated by adding (1) $3.50 to the product obtained by (2) multiplying the closing prices per share of Take-Two common stock on those dates by an exchange ratio of 0.03864 in the case of the implied per share value of the merger consideration as of January 7, 2022, calculated based on the Take-Two common stock price of $164.60 as of such date, and an exchange ratio of                  in the case of the implied per share value of the merger consideration as of             , 2022, calculated based on the Take-Two common stock price of $         as of such date.

 

     Take-Two
Common
Stock
     Zynga
Common
Stock
     Implied Per
Share Value
of Merger
Consideration
 

January 7, 2022

   $ 164.60      $ 6.00      $ 9.86  

                , 2022

   $        $        $    

The market prices of Take-Two common stock and Zynga common stock have fluctuated since the date of the announcement of the combination and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Zynga special meeting and the date the merger is completed and thereafter (in the case of Take-Two common stock). The number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. The exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. The Take-Two common stock price and the exchange ratio will not be determinable until the third trading day immediately preceding the closing date of the combination.

The value of the merger consideration to be received in exchange for each share of Zynga common stock when received by Zynga stockholders after the combination is completed could be greater than, less than or the same as shown in the table above. Accordingly, Take-Two stockholders and Zynga stockholders are advised to obtain current market quotations for Take-Two common stock and Zynga common stock in determining whether to vote in favor of the Take-Two share issuance proposal and the Take-Two charter amendment proposal, in the case of Take-Two stockholders, or the Zynga merger proposal, in the case of Zynga stockholders.

Dividends

Take-Two has never declared or paid any cash dividends on its common stock. Take-Two anticipates retaining future earnings for the development, operation, and expansion of its business, and does not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, Take-Two’s ability to pay cash dividends on Take-Two common stock may be prohibited or limited by the terms of future debt financing arrangements.

Zynga has never declared nor paid any cash dividends on Zynga common stock. Under the terms of the merger agreement, Zynga is not permitted to declare, accrue, set aside, establish a record date for or pay any dividend or other distribution during the pre-closing period without the prior written consent of Take-Two.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part, the documents that Take-Two and Zynga refer you to in the registration statement and oral statements made or to be made by Take-Two and Zynga include certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995, which are referred to as the “safe harbor provisions.” Statements contained or incorporated by reference in the registration statement of which this joint proxy statement/prospectus forms a part that are not historical facts are forward-looking statements, including statements regarding the anticipated benefits of the combination, the anticipated impact of the combination on the combined company’s business and future financial and operating results, the expected amount and timing of anticipated synergies from the combination, the anticipated timing of closing of the combination and other aspects of Take-Two’s or Zynga’s operations or operating results. Words such as “may,” “should,” “will,” “believe,” “expect,” “anticipate,” “target,” “project,” and similar phrases that denote future expectations or intent regarding the combined company’s financial results, operations, and other matters are intended to identify forward-looking statements that are intended to be covered by the safe harbor provisions. Investors are cautioned not to rely upon forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause future events to differ materially from the forward-looking statements in this report, including:

 

   

the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require Take-Two to pay a termination fee to Zynga or require Zynga to pay a termination fee to Take-Two;

 

   

the inability to complete the combination due to the failure of Take-Two stockholders to approve the share issuance or of Zynga stockholders to adopt the merger agreement, or the failure to satisfy any of the other conditions to the completion of the combination, including regulatory approvals, in a timely manner or otherwise;

 

   

risks relating to fluctuations of the market value of Take-Two and Zynga’s common stock before the completion of the combination, including as a result of uncertainty as to the long-term value of the common stock of the combined company or as a result of broader stock market movements;

 

   

risks related to fluctuations in the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination pursuant to the terms of the merger agreement, and risks that the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock;

 

   

delays in closing, or the failure to close, the combination for any reason, could negatively impact Take-Two, Zynga or the combined company;

 

   

the risk that disruptions from the pendency of the combination will disrupt Take-Two’s or Zynga’s business, including current plans and operations, which may adversely impact Take-Two’s or Zynga’s respective businesses;

 

   

difficulties or delays in integrating the businesses of Take-Two and Zynga following completion of the combination or fully realizing the anticipated synergies or other benefits expected from the combination;

 

   

certain restrictions during the pendency of the combination that may impact the ability of Take-Two or Zynga to pursue certain business opportunities or strategic transactions;

 

   

the risk of legal proceedings that have been or may be instituted against Take-Two, Zynga, their directors and/or others relating to the combination;

 

   

the diversion of the attention of the respective management teams of Take-Two and Zynga from their respective ongoing business operations;

 

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the risk that the combination or any announcement relating to the combination could have an adverse effect on the ability of Take-Two or Zynga to retain and hire key personnel;

 

   

the risk that uncertainty about the combination may adversely affect relationships with Take-Two and Zynga’s customers, partners, suppliers, and employees, whether or not the combination is completed;

 

   

the potentially significant amount of any costs, fees, expenses, impairments or charges related to the combination;

 

   

the potential dilution of Take-Two stockholders’ and Zynga stockholders’ ownership percentage of the combined company as compared to their ownership percentage of Take-Two or Zynga, as applicable, prior to the combination;

 

   

the business, economic, political and other conditions in the countries in which Take-Two or Zynga operate;

 

   

the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, Take-Two’s or Zynga’s respective business, operations, revenue, cash flow, operating expenses, hiring, demand for their respective solutions, sales cycles, customer retention, and their respective customers’ businesses and industries;

 

   

Zynga directors and executive officers having interests in the combination that are different from, or in addition to, the interests of Zynga stockholders generally; and

 

   

the possibility that the combined company’s results of operations, cash flows and financial position after the combination may differ materially from the unaudited pro forma condensed combined financial information contained in this proxy statement/prospectus.

The forward-looking statements contained in this joint proxy statement/prospectus are also subject to additional risks, uncertainties, and factors, including those described in Take-Two’s and Zynga’s most recent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed by either of them from time to time with the SEC. See the section titled “Where You Can Find More Information.”

The forward-looking statements included in this report are made only as of the date hereof. Take-Two and Zynga do not undertake to update, alter or revise any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law.

 

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RISK FACTORS

In considering how to vote on the proposals to be considered and voted on at the Take-Two special meeting or the Zynga special meeting, you are urged to carefully consider all of the information contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.” You should also read and consider the risks associated with each of the businesses of Take-Two and Zynga because those risks will affect the combined company. The risks associated with the business of Take-Two can be found in Take-Two’s Exchange Act reports, including Take-Two’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021 and Take-Two’s Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2021, September 30, 2021, and December 31, 2021 which are incorporated by reference into this joint proxy statement/prospectus. The risks associated with the business of Zynga can be found in Zynga’s Exchange Act reports, including Zynga’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which are incorporated by reference into this joint proxy statement/prospectus. In addition, you are urged to carefully consider the following material risks relating to the combination and the businesses of Take-Two, Zynga and the combined company.

Risks Relating to the Combination

Because the exchange ratio is not fixed and will be adjusted based on the price of Take-Two common stock prior to the effective time of the combination, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination and market value of the consideration payable to Zynga stockholders in the combination is uncertain.

At the effective time, each share of Zynga common stock that is outstanding immediately prior to the effective time (other than shares of Zynga common stock held, directly or indirectly, by Zynga or Take-Two, any of their respective wholly owned subsidiaries, or held in Zynga’s treasury), will be converted into the right to (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. Because the exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. The market prices of Take-Two common stock and Zynga common stock have fluctuated prior to and after the date of the announcement of the merger agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Take-Two special meeting and the Zynga special meeting, and through the date the combination is completed.

Because the exchange ratio will depend on the market price of Take-Two common stock during the 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

 

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closing date, Zynga stockholders will not know or be able to determine at the time of the Zynga special meeting the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination or the market value of the consideration payable to Zynga stockholders in the combination. Similarly, Take-Two stockholders will not know or be able to determine at the time of the Take-Two special meeting the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination or the market value of the shares of Take-Two common stock to be issued pursuant to the merger agreement compared to the market value of the shares of Zynga common stock that are being exchanged in the combination.

It is impossible to accurately predict the market price of Take-Two common stock at the completion of the combination or during the period over which the Take-Two common stock price is calculated and, therefore, impossible to accurately predict the number or value of the shares of Take-Two common stock that Zynga stockholders will receive in the combination. Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Take-Two’s or Zynga’s respective businesses, operations and prospects, the effect of uncertainties related to the COVID-19 pandemic on U.S. and global markets, Take-Two’s or Zynga’s respective business, operations, revenue, cash flow, operating expenses, hiring, demand for their respective solutions, sales cycles, customer retention and their respective customers’ business and industries, market assessments of the likelihood that the combination will be completed, interest rates and other factors generally affecting the respective prices of Take-Two common stock and Zynga common stock, and the timing of the combination and receipt of required regulatory approvals.

Many of these factors are beyond the control of Take-Two and Zynga, and neither Take-Two nor Zynga is permitted to terminate the merger agreement solely due to a decline in the market price of the common stock of the other party. You are urged to obtain current market quotations for Take-Two common stock and Zynga common stock in determining whether to vote in favor of the Take-Two share issuance proposal and the Take-Two charter amendment proposal, in the case of Take-Two stockholders, or the Zynga merger proposal, in the case of Zynga stockholders.

The market price of Take-Two common stock will continue to fluctuate after the combination.

Upon completion of the combination, Zynga stockholders will become holders of Take-Two common stock. The market price of the Take-Two common stock will continue to fluctuate, potentially significantly, following completion of the combination, including for the reasons described above. As a result, former Zynga stockholders could lose some or all of the value of their investment in Take-Two common stock. In addition, any significant price or volume fluctuations in the stock market generally could have a material adverse effect on the market for, or liquidity of, the Take-Two common stock received in the combination, regardless of the combined company’s actual operating performance.

The combination may not be completed and the merger agreement may be terminated in accordance with its terms.

The combination is subject to a number of conditions that must be satisfied, including the receipt of certain regulatory approvals and the approval by Take-Two stockholders of the Take-Two share issuance proposal, the Take-Two charter amendment proposal, and approval by Zynga stockholders of the Zynga merger proposal, or waived (to the extent permitted), in each case prior to the completion of the combination. These conditions are described in the section titled “The Merger Agreement—Conditions to Completion of the Combination.” These conditions to the completion of the combination, some of which are beyond the control of Take-Two and Zynga, may not be satisfied or waived in a timely manner or at all, and, accordingly, the combination may be delayed or not completed.

Additionally, either Take-Two or Zynga may terminate the merger agreement under certain circumstances, subject to the payment of a “termination fee” in certain cases, including if the merger agreement is terminated by

 

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either Take-Two or Zynga as a result of an adverse change in the recommendation of the other party’s board of directors. In such circumstances, Take-Two is required to pay to Zynga (in the case of a termination by Zynga), or Zynga is required to pay to Take-Two (in the case of a termination by Take-Two), a termination fee of $550 million. In addition, Zynga is required to pay to Take-Two a termination fee of $550 million if Zynga terminates the merger agreement to enter into a definitive agreement for an alternative business combination transaction that constitutes a “superior proposal,” unless Zynga had terminated the merger agreement during the go-shop period, in which case Zynga would have been required to pay to Take-Two a lower termination fee of $400 million. See the sections titled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees and Expenses; Liability for Breach” for a more complete discussion of the circumstances under which the merger agreement could be terminated and when a termination fee may be payable by Take-Two or Zynga.

Failure to complete the combination could negatively impact the future business and financial results of Take-Two and Zynga and the trading prices of the Take-Two common stock or Zynga common stock.

If the combination is not completed for any reason, including because Take-Two stockholders fail to approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal, or because Zynga stockholders fail to approve the Zynga merger proposal, the ongoing businesses of Take-Two and Zynga may be adversely affected and, without realizing any of the expected benefits of having completed the combination, Take-Two and Zynga would be subject to a number of risks, including the following:

 

   

each company may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

   

each company may experience negative reactions from its customers, partners, suppliers and employees;

 

   

each company will be required to pay its respective costs relating to the combination, such as financial advisory, legal, accounting costs and associated fees and expenses, whether or not the combination is completed;

 

   

there may be disruptions to each company’s respective business resulting from the announcement and pendency of the combination, and any adverse changes in their relationships with their respective customers, partners, suppliers, other business partners and employees may continue or intensify; and

 

   

each company will have committed substantial time and resources to matters relating to the combination (including integration planning) which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to either company as an independent company.

The market price for shares of Take-Two common stock may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market price of shares of Zynga common stock.

Upon completion of the combination, Zynga stockholders will receive shares of Take-Two common stock and will accordingly become Take-Two stockholders. Take-Two’s business differs from that of Zynga, and Take-Two’s results of operations and stock price may be adversely affected by factors different from those that historically have affected or currently affect Zynga’s results of operations and stock price. Following the completion of the combination, Zynga will be part of a larger company, so decisions affecting Zynga may be made in respect of the larger combined business as a whole rather than the Zynga business individually. For a discussion of the businesses of each of Take-Two and Zynga and some important factors to consider in connection with those businesses, see the section titled “The Parties to the Combination” and the other information contained or incorporated in this joint proxy statement/prospectus. See the section titled “Where You Can Find More Information.”

 

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The share issuance may cause the market price of Take-Two common stock to decline.

Based on                  shares of Zynga common stock issued and outstanding as of                 , the latest practicable date prior to the date of this joint proxy statement/prospectus, and the maximum exchange ratio permitted under the merger agreement of 0.0406, it is expected that Take-Two will issue as much as                  million shares of Take-Two common stock in the combination. Former Zynga stockholders may decide not to hold the shares of Take-Two common stock that they will receive in the combination, and Take-Two stockholders may decide to reduce their investment in Take-Two as a result of the changes to Take-Two’s investment profile as a result of the combination. Both the issuance of this amount of new shares in the combination and any subsequent sales of these shares may cause the market price of Take-Two common stock to decline.

Zynga stockholders who receive shares of Take-Two common stock in the combination will have rights as Take-Two stockholders that differ from their current rights as Zynga stockholders.

Upon completion of the combination, Zynga stockholders will no longer be stockholders of Zynga and will instead become stockholders of Take-Two. As Take-Two and Zynga are both Delaware corporations, the rights of Take-Two stockholders and Zynga stockholders are not materially different. However, there are certain differences in the rights of Take-Two stockholders under the Take-Two charter and Take-Two bylaws, and of Zynga stockholders under the Zynga charter and the Zynga bylaws. See the section titled “Comparison of Stockholders’ Rights” for a discussion of these rights.

After the combination, Zynga stockholders will have a significantly lower ownership and voting interest in Take-Two than they currently have in Zynga and will exercise less influence over management and policies of the combined company.

Based on the number of shares of Take-Two common stock and Zynga common stock outstanding on                 , the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the combination, former Zynga stockholders are expected to own approximately     % of the outstanding shares of Take-Two common stock and the current Take-Two stockholders are expected to own approximately     % of the outstanding shares of Take-Two common stock. Consequently, former Zynga stockholders will have less influence over the management and policies of the combined company than they currently have over the management and policies of Zynga. Pursuant to the merger agreement, however, on or prior to the effective time, Take-Two will appoint two members of the Zynga board of directors, selected by Zynga and approved by Take-Two prior to the effective time, to the Take-Two of board of directors.

Until the completion of the combination or the termination of the merger agreement pursuant to its terms, Take-Two and Zynga are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Take-Two, Zynga and/or their respective stockholders.

From and after the date of the merger agreement and prior to the completion of the combination or the termination of the merger agreement pursuant to its terms, the merger agreement restricts Take-Two and Zynga from taking specified actions without the consent of the other party and requires that the businesses of Take-Two, Zynga and their respective subsidiaries be conducted in the ordinary course. These restrictions may prevent Take-Two or Zynga, as applicable, from taking actions during the pendency of the combination that would have been beneficial. Adverse effects arising from these restrictions during the pendency of the combination could be exacerbated by any delays in the completion of the combination or termination of the merger agreement. See the section titled “The Merger Agreement—Conduct of Business.”

Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the combination.

The combination is subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, the effectiveness of the registration statement on Form S-4 of which

 

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this joint proxy statement/prospectus forms a part registering the issuance of shares of Take-Two common stock to Zynga stockholders in connection with the combination and the absence of any stop order or proceedings by the SEC with respect thereto; the expiration or earlier termination of any applicable waiting period (and any extension thereof) under the HSR Act; consent, waiver, authorization or approval of the applicable antitrust regulatory authority in certain specified non-U.S. jurisdictions; approval for listing on Nasdaq of the shares of Take-Two common stock to be issued in connection with the combination; and the absence of governmental restraints or prohibitions preventing the consummation of the combination. The obligation of each of Take-Two and Zynga to complete the combination is also conditioned on, among other things, the accuracy of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality and material adverse effect qualifiers), and the performance by the other party in all material respects of its obligations under the merger agreement. No assurance can be given that the required stockholder approvals and governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the required conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the combination could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Take-Two and Zynga expect to achieve if the combination is successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the combination, see the section titled “The Merger Agreement—Conditions to Completion of the Combination.”

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the combination.

The success of the combination will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by Take-Two and Zynga. It is possible that these employees may decide not to remain with Take-Two or Zynga, as applicable, while the combination is pending, or with the combined company. If key employees of either company terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating Take-Two and Zynga to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, Take-Two and Zynga may not be able to locate suitable replacements for any key employees that leave either company or offer employment to potential replacements on reasonable terms. Moreover, there could be disruptions to or distractions for the workforce and management, including disruptions associated with integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of Take-Two and Zynga to the same extent that those companies have been able to attract or retain their own employees in the past.

The combination, and uncertainty regarding the combination, may cause business partners, or vendors to delay or defer decisions concerning Take-Two or Zynga and adversely affect each company’s ability to effectively manage its respective business, which could adversely affect each company’s business, operating results and financial position and, following the completion of the combination, the combined company’s.

The combination will happen only if the stated conditions are met, including the approval of the Take-Two share issuance proposal, the approval of the Take-Two charter amendment proposal, the approval of the Zynga merger proposal and the receipt of required regulatory approvals, among other conditions. Many of the conditions are beyond the control of Take-Two and Zynga, and both parties also have certain rights to terminate the merger

 

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agreement. Accordingly, there may be uncertainty regarding the completion of the combination. This uncertainty may cause existing or business partners, advertisers and vendors to:

 

   

delay or defer other decisions concerning Take-Two, Zynga or the combined company, including entering into contracts with Take-Two or Zynga or making other decisions concerning Take-Two or Zynga or seek to change or cancel existing business relationships with Take-Two or Zynga; or

 

   

otherwise seek to change the terms on which they do business with Take-Two, Zynga or the combined company.

Any such disruptions such as delays or deferrals of those decisions or changes in existing agreements could adversely affect the respective business, operating results and financial position of Take-Two and Zynga, whether the combination is ultimately completed, and following the completion of the combination, the combined company, including an adverse effect on the combined company’s ability to realize the anticipated synergies and other benefits of the combination. The risk, and adverse effect, of any such disruptions could be exacerbated by a delay in completion of the combination or termination of the merger agreement.

Whether or not the combination is completed, the announcement and pendency of the combination could cause disruptions in the businesses of Take-Two and Zynga, which could have an adverse effect on their respective businesses and financial results.

Whether or not the combination is completed, the announcement and pendency of the combination could cause disruptions in the businesses of Take-Two and Zynga, including by diverting the attention of Take-Two and Zynga’s respective management and employee teams, such as those involved in day-to-day operations and sales, toward the completion of the combination. In addition, Take-Two and Zynga have each diverted significant management resources in an effort to complete the combination and are each subject to restrictions contained in the merger agreement on the conduct of their respective businesses. If the combination is not completed, Take-Two and Zynga will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.

Zynga directors and executive officers have interests and arrangements that may be different from, or in addition to, those of Zynga stockholders generally.

When considering the recommendations of the Zynga board of directors on how to vote on the proposals described in this joint proxy statement/prospectus, Zynga stockholders should be aware that Zynga directors and executive officers may have interests in the combination that are different from, or in addition to, those of Zynga stockholders generally. These interests include the treatment in the combination of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements, Take-Two’s agreement to add two of Zynga’s current directors to the Take-Two board of directors as designated by Zynga and approved by Take-Two, and the right to continued indemnification of former Zynga directors and officers by the combined company. The Zynga board of directors was aware of and considered these interests when it determined that the combination was fair to, and in the best interests of, Zynga and its stockholders, approved and declared advisable the merger agreement and the consummation of the transactions contemplated thereby, including the combination, and recommended that Zynga stockholders adopt the merger agreement. The interests of Zynga directors and executive officers are described in more detail in the section titled “Interests of Zynga Directors and Executive Officers in the Combination.”

The merger agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either Take-Two or Zynga.

The merger agreement contains “no shop” provisions that restrict the ability of Take-Two and Zynga to, among other things (each as described in the sections titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers—Zynga No-Shop Period” and “The Merger Agreement— Go-Shop Period;

 

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Restrictions on Solicitations of Other Offers—Take-Two No-Shop Period”), subject to limited exceptions set forth in the merger agreement:

 

   

in the case of Zynga: (i) solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Zynga alternative acquisition proposal; (ii) continue, enter into, engage in or otherwise participate in any discussions or negotiations with any person regarding any Zynga alternative acquisition proposal; (iii) grant any waiver, amendment or release of any third party under any standstill or confidentiality provision in connection with clauses (i) and (ii); or (iv) agree or resolve to take, or take, any of the foregoing prohibited actions; and

 

   

in the case of Take-Two: (i) solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Take-Two alternative acquisition proposal; (ii) continue, enter into, engage in or otherwise participate in any discussions or negotiations with any person regarding any Take-Two alternative acquisition proposal; (iii) grant any waiver, amendment or release of any third party under any standstill or confidentiality provision in connection with clauses (i) and (ii); or (iv) agree or resolve to take, or take, any of the foregoing prohibited actions.

Furthermore, there are only limited exceptions to the requirement under the merger agreement that neither the Take-Two board of directors nor the Zynga board of directors withdraw or modify the Take-Two board recommendation or the Zynga board recommendation, as applicable (each as defined in the section titled “The Merger Agreement—Changes in Board Recommendations”). Although the Take-Two board of directors or Zynga board of directors is permitted to effect a change of recommendation, after complying with certain procedures set forth in the merger agreement, in response to certain superior offers or to certain intervening events (if the applicable board of directors determines in good faith, after having taken into account the advice of outside legal counsel, that a failure to do so would be inconsistent with its fiduciary duties under applicable law), such change of recommendation would entitle the other party to terminate the merger agreement and receive a termination fee from the party making a change of recommendation. See the sections titled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees and Expenses; Liability for Breach.”

These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the merger consideration in the combination, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee.

The combination will involve substantial costs.

Take-Two and Zynga have incurred and expect to incur non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the combination. Such costs include, among others, filing and registration fees with the SEC, printing and mailing costs associated with this joint proxy/registration statement, and legal, accounting, investment banking, consulting, public relations and proxy solicitation fees. Some of these costs are payable by Take-Two or Zynga regardless of whether the combination is completed.

The combined company will also incur restructuring and integration costs in connection with the combination. There are processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the combination and the integration of Zynga’s business. Although Take-Two expects that the elimination of duplicative costs, strategic benefits and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, combination-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all. While Take-Two

 

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has assumed that certain expenses would be incurred in connection with the combination and the other transactions contemplated by the merger agreement, there are many factors beyond Take-Two’s control that could affect the total amount or the timing of the integration and implementation expenses.

Take-Two stockholders will not be entitled to appraisal rights in the combination.

Appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from certain extraordinary transactions, such as a merger in certain circumstances, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the extraordinary transaction. Under the DGCL, stockholders generally do not have appraisal rights if the shares of stock they hold are either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash in lieu of fractional shares or (d) any combination of the foregoing.

Because the combination consists of Merger Sub 1 merging with and into Zynga, with Zynga immediately thereafter merging with and into Merger Sub 2, holders of Take-Two common stock will continue to hold their Take-Two shares following completion of the combination and are not entitled to appraisal rights in connection with the combination.

Because Zynga stockholders are required by the terms of the merger agreement to accept cash consideration for their shares of Zynga common stock, holders of Zynga common stock are entitled to appraisal rights in connection with the combination. See the section titled “Appraisal Rights.

Lawsuits may in the future be filed against Take-Two, Zynga, and members of their respective boards of directors, challenging the combination, and an adverse ruling in any such lawsuit may prevent the combination from becoming effective or from becoming effective within the expected time frame.

Transactions such as the combination are frequently subject to litigation or other legal proceedings, including actions alleging that the Take-Two board of directors or Zynga board of directors breached their respective fiduciary duties to their stockholders by entering into the merger agreement, by failing to obtain a greater value in the transaction for their stockholders or otherwise. Neither Take-Two nor Zynga can provide assurance that such litigation or other legal proceedings will not be brought. If litigation or other legal proceedings are in fact brought against Take-Two or Zynga, or against the Take-Two board of directors or Zynga board of directors, they will defend against it, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on the business, results of operation or financial position of Take-Two, Zynga or the combined company, including through the possible diversion of either company’s resources or distraction of key personnel.

Furthermore, one of the conditions to the completion of the combination is that no injunction by any governmental body of competent jurisdiction will be in effect that prevents the consummation of the combination. As such, if any of the plaintiffs are successful in obtaining an injunction preventing the consummation of the combination, that injunction may prevent the combination from becoming effective or from becoming effective within the expected time frame.

If the combination does not qualify as a reorganization there may be adverse tax consequences.

The parties intend that the combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. If the combination were to fail to qualify as a reorganization, U.S. holders of Zynga common stock generally would recognize gain or loss, as applicable, equal to the difference between (i) the sum of the fair

 

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market value of the Take-Two common stock and cash consideration (including in lieu of fractional shares) received by such holder in the combination; and (ii) such holder’s adjusted tax basis in its Zynga common stock. See the section titled “U.S. Federal Income Tax Consequences of the Combination.

Risks Relating to the Combined Company

Combining the businesses of Take-Two and Zynga may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the combination, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock.

The success of the combination will depend on, among other things, Take-Two’s ability to realize the anticipated benefits and operational scale efficiencies from combining the businesses of Take-Two and Zynga. This success will depend largely on Take-Two’s ability to successfully integrate the business of Zynga. If Take-Two is not able to successfully integrate Zynga’s business within the anticipated time frame, or at all, the anticipated operational scale efficiencies and other benefits of the combination may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the combination and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company.

Take-Two and Zynga have operated and, until the completion of the merger, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Take-Two or Zynga employees, the loss of players, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. The challenges involved in this integration, which will be complex and time-consuming, include the following:

 

   

combining the companies’ operations and corporate functions;

 

   

combining the businesses of Take-Two and Zynga and meeting the capital requirements of the combined company in a manner that permits the combined company to achieve any revenue synergies or operational scale efficiencies anticipated to result from the combination, the failure of which would result in the anticipated benefits of the combination not being realized in the time frame currently anticipated or at all;

 

   

integrating and retaining personnel from the two companies, especially in the COVID-19 environment which has required employees to work remotely in most locations;

 

   

integrating the companies’ technologies and technologies licensed from third parties;

 

   

integrating and unifying the each company’s intellectual property and capabilities in game development, publishing and commercialization;

 

   

identifying and eliminating redundant and underperforming functions and assets;

 

   

harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

   

maintaining existing agreements with business partners, suppliers and vendors, avoiding delays in entering into new agreements with prospective business partners, suppliers and vendors, and leveraging relationships with such third parties for the benefit of the combined company;

 

   

addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

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consolidating the companies’ administrative and information technology infrastructure;

 

   

coordinating sales motions and go-to-market efforts;

 

   

coordinating geographically dispersed organizations; and

 

   

effecting actions that may be required in connection with obtaining regulatory or other governmental approvals.

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the combination and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company.

The combined company may be unable to realize the anticipated synergies and expects to incur substantial expenses related to the combination, which could adversely affect the combined company’s business, financial condition and results of operations.

As described under “The CombinationTake-Two Unaudited Prospective Financial Information”, the combination is expected to generate $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual Net Bookings opportunities over time. The combined company’s ability to achieve such estimated cost synergies and Net Bookings opportunities in the timeframe described, or at all, is subject to various assumptions, which may or may not prove to be accurate. As a consequence, the combined company may not be able to realize all of these cost synergies and Net Bookings opportunities within the timeframe expected or at all. In addition, the combined company may incur additional or unexpected costs in order to realize these benefits. Failure to achieve the expected Net Booking opportunities and cost synergies could significantly reduce the expected benefits associated with the combination.

Certain contractual counterparties may seek to modify contractual relationships with the combined company, which could have an adverse effect on the combined company’s business and operations.

As a result of the combination, the combined company may experience impacts on relationships with contractual counterparties (such as business partners, vendors or other third party service providers) that may harm the combined company’s business and results of operations. Certain counterparties may seek to terminate or modify contractual obligations following the combination whether or not contractual rights are triggered as a result of the combination. There can be no guarantee that Take-Two’s or Zynga’s contractual counterparties will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the combination. If any contractual counterparties (such as business partners, vendors or other third party service providers) seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then the combined company’s business and results of operations may be harmed.

Completion of the transaction may trigger change in control, assignment or other provisions in certain agreements to which Zynga is a party, which may have an adverse impact on the combined company’s business and results of operations.

The completion of the combination may trigger change in control, assignment and other provisions in certain agreements to which Zynga is a party. If Zynga is unable to negotiate waivers of or consents under those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages or other remedies. Even if Zynga is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to the combined company. Any of the foregoing or similar developments may have an adverse impact on the business, financial condition and results of operations of the combined company, or the ability of Take-Two to successfully integrate Zynga’s business.

 

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The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations.

The combined company may be exposed to increased litigation from stockholders, customers, partners, suppliers, consumers and other third parties due to the combination of Take-Two’s and Zynga’s businesses following the combination. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and may not be reflective of the operating results and financial condition of the combined company following completion of the combination.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus are presented for illustrative purposes only, contain a variety of adjustments, assumptions and preliminary estimates and are not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the combination been completed on the dates indicated. The combined company’s actual results and financial position after the combination may differ materially and adversely from the unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus. The unaudited pro forma condensed combined financial information reflects adjustments based upon preliminary estimates of the fair value of assets to be acquired and liabilities to be assumed. The final acquisition accounting will be based upon the actual consideration transferred and the fair value of the assets and liabilities of Zynga as of the date of the completion of the combination. Accordingly, the final acquisition accounting may differ materially from the unaudited pro forma condensed combined financial information reflected in this joint proxy statement/prospectus. For more information, see the section titled Unaudited Pro Forma Condensed Combined Financial Information.”

While presented with numeric specificity, the unaudited pro forma condensed combined financial information provided in this joint proxy statement/prospectus is based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition, general business, the software and related industries, and economic, market and financial conditions and additional matters specific to Take-Two’s or Zynga’s business, as applicable) that are inherently subjective and uncertain and are beyond the control of the respective management teams of Take-Two and Zynga. As a result, actual results may differ materially from the unaudited pro forma condensed combined financial information. Important factors that may affect actual results include, but are not limited to, risks and uncertainties relating to Take-Two’s or Zynga’s business, as applicable (including each company’s ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, general business and economic conditions. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information.”

The combined company’s debt may limit its financial flexibility.

To finance the combination, Take-Two will incur indebtedness in connection with the completion of the combination. Zynga also has existing indebtedness.

Take-Two’s or Zynga’s substantial indebtedness could have adverse effects on such company’s and/or the combined company’s financial condition and results of operations, including:

 

   

increasing its vulnerability to changing economic, regulatory and industry conditions;

 

   

limiting its ability to compete and its flexibility in planning for, or reacting to, changes in its business and the industry;

 

   

limiting its ability to borrow additional funds; and

 

   

increasing its interest expense and requiring it to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, and share repurchases, and other purposes.

 

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The companies’ ability to arrange any additional financing for the purposes described above or otherwise will depend on, among other factors, the companies’ respective financial positions and performance, as well as prevailing market conditions and other factors beyond their control. The level and quality of the combined company’s earnings, operations, business and management, among other things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned to the combined company by the ratings agencies may negatively impact the combined company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can be no assurance that the combined company will be able to obtain financing on acceptable terms or at all. In addition, there can be no assurance that the combined company will be able to maintain the current creditworthiness or prospective credit ratings of Take-Two or Zynga, and any actual or anticipated changes or downgrades in such credit ratings may have a negative impact on the liquidity, capital position or access to capital markets of the combined company.

The COVID-19 pandemic may cause harm to the business, results of operations, and financial condition of the combined company.

The COVID-19 pandemic may have a material adverse effect on the results of operations of the combined company. The global spread of COVID-19 has created significant uncertainty, resulting in volatility and economic disruption. The extent to which COVID-19 has an impact on the combined company’s business, operations, or financial results will depend on numerous evolving factors that may not be accurately predicted, including the duration and scope of the pandemic; governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic; economic activity and related actions taken in response to the pandemic; the effect on consumer demand for the combined company’s products and the discretionary spending patterns of the combined company’s customers, including the ability of customers to pay for the combined company’s products; the combined company’s ability to develop, market, and sell its products, including as a result of travel restrictions and people working from home; the impact on the operations of the combined company’s counterparties, including the physical retail, digital download online platforms, and cloud streaming services the combined company will rely on for the distribution of its products, the suppliers who manufacture the combined company’s physical products, and other third parties with which the combined company partners (e.g. to market or ship its products); any closures of the combined company’s, its customers’, and counterparties’ offices and facilities; additional volatility in exchange rates; the impact of potential inflation; and the impact of reductions in interest rates by the Federal Reserve and other central banks, including on the combined company’s short-term investment portfolio.

Further, “shelter-in-place,” quarantine, or other such initiatives by governmental entities could also disrupt the combined company’s operations. In such situations, if employees or third-party developers who cannot optimally perform their responsibilities from home are not able to or are unwilling to report to work, the combined company may experience material interruptions in product development and delays in bringing products to market. Such circumstances may also impact the effectiveness of the combined company’s quality controls and game testing measures. An increase in the number of employees working remotely also increases the potential adverse impact of risk associated with information technology systems and networks, including cyber-attacks, computer viruses, malicious software, security breach, and telecommunication failures, both for systems and networks the combined company controls directly and for those that employees and third-party developers rely on to work remotely. Any failure to prevent or mitigate security breaches or cyber risks or detect, or respond adequately to, a security breach or cyber risk, or any other disruptions to the combined company’s information technology systems and networks, can have adverse effects on the combined company’s business. The spread of COVID-19 has caused Take-Two and Zynga to modify their business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and the combined company may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers and business partners. Further, key personnel could contract COVID-19, hindering their availability and productivity.

Additionally, sports organizations’ operations and seasons have and may be altered based on the response to COVID-19. Such events could affect the demand for the combined company’s sports titles.

 

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While Take-Two and Zynga have developed and continue to develop plans to help mitigate the negative impact of the pandemic on their business, these efforts may not be effective, and a protracted economic downturn may limit the effectiveness of such mitigation efforts. Any of these considerations described above could cause or contribute to the risks described elsewhere herein and could materially adversely affect the combined company’s business, financial condition, results of operations or stock price. Additionally, while Take-Two and Zynga have seen increased demand for their products due to stay-at-home orders, the curtailment of certain other forms of entertainment, and other pandemic-related factors that make consumers more inclined to spend time at home, benefiting Take-Two and Zynga’s financial results and operating metrics, the trends in fiscal year 2021 with respect to Take-Two and Zynga’s revenues, net income, and other financial results and operating metrics may not be indicative of results for future periods, particularly if these pandemic-related factors become less significant.

Take-Two’s charter documents designate specific courts as the exclusive forum for certain litigation that may be initiated by Take-Two’s stockholders, which could limit the ability of stockholders of the combined company to obtain a favorable judicial forum for disputes with the combined company.

Take-Two’s certificate of incorporation and bylaws (which will remain the combined company’s certificate of incorporation and bylaws following the closing) provide that, unless Take-Two consents in writing to the selection of an alternative forum, the sole and exclusive forum for (A) any derivative action or proceeding brought on Take-Two’s behalf; (B) any action asserting a claim of breach of a fiduciary duty owed by any of Take-Two’s directors, officers, or other employees to Take-Two or its stockholders; (C) any action asserting a claim arising pursuant to any provision of the DGCL or the Take-Two certificate of incorporation or Take-Two bylaws (including the interpretation, validity or enforceability thereof); or (D) any action asserting a claim governed by the internal affairs doctrine, is the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior Court of the State of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the United States District Court for the District of Delaware, subject to the court’s having personal jurisdiction over the indispensable parties named therein, which is referred to as the “Delaware forum provision.” The Delaware forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. The Take-Two bylaws further provide that unless Take-Two consents in writing to the selection of an alternative forum, the district courts of the United States shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, which is referred to as the “federal forum provision.” In addition, the Take-Two bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of Take-Two’s capital stock is deemed to have notice of and consented to the Delaware forum provision and the federal forum provision; provided, however, that stockholders cannot and will not be deemed to have waived Take-Two’s compliance with the U.S. federal securities laws and the rules and regulations thereunder.

The Delaware forum provision and the federal forum provision in the Take-Two bylaws may impose additional litigation costs on stockholders in pursuing any such claims. Additionally, these forum selection clauses may limit Take-Two stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with Take-Two or its directors, officers or employees, which may discourage the filing of lawsuits against Take-Two and its directors, officers and employees, even though an action, if successful, might benefit Take-Two stockholders. In addition, Section 22 of the Securities Act creates a concurrent jurisdiction for state and federal courts over all suits brought concerning a duty or liability created by the securities laws, rules and regulations thereunder. While the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce its federal forum provision. If the federal forum provision is found to be unenforceable, Take-Two may incur additional costs associated with resolving such matters. The federal forum provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to Take-Two than its stockholders.

 

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Other Risk Factors Related to Take-Two and Zynga

Take-Two’s and Zynga’s businesses are and will be subject to the risks described above. In addition, Take-Two and Zynga are, and will continue to be, subject to the risks described in, as applicable, Take-Two’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021 and Zynga’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as such risks may be updated or supplemented in each company’s subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each of which are filed with the SEC and incorporated by reference in this joint proxy statement/prospectus. See the section titled “Where You Can Find More Information.”

 

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THE PARTIES TO THE COMBINATION

Take-Two Interactive Software, Inc.

Take-Two is a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. Take-Two develops and publishes products principally through Rockstar Games, 2K, Private Division, and T2 Mobile Games. Our products are designed for console systems and personal computers, including smartphones and tablets, and are delivered through physical retail, digital download, online platforms, and cloud streaming services. Take-Two’s principal executive offices are located at 110 West 44th Street, New York, New York, 10036, and its telephone number is (646) 536-2842.

Zynga Inc.

Originally founded in 2007, Zynga is a global leader in interactive entertainment with a mission to connect the world through games. With massive global reach in more than 175 countries, Zynga has a diverse portfolio of popular game franchises that have been downloaded more than four billion times. We develop, market and operate social games as live services played on mobile platforms, such as Apple’s iOS and Google’s Android, social networking platforms, such as Facebook and Snapchat, Personal Computers, consoles, such as Nintendo’s Switch game console, and other platforms. We have been a pioneer in social gaming and in making “play” a core activity on mobile devices and social networking platforms. Zynga’s principal executive offices are located at 699 Eighth Street, San Francisco, CA 94103, and its telephone number is (855) 449-9642.

Zebra MS I, Inc.

Merger Sub 1 was formed by Take-Two solely in contemplation of the combination, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. Immediately after the merger, by operation of the subsequent merger, the surviving corporation in the merger will be merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company and as a wholly owned subsidiary of Take-Two, and Merger Sub 2 will succeed to all of the property, rights, privileges, powers, franchises, debts, liabilities of the surviving corporation. Merger Sub 1’s principal executive offices are located at 110 West 44th Street, New York, New York, 10036, and its telephone number is (646) 536-2842.

Zebra MS II, Inc.

Merger Sub 2 was formed by Take-Two solely in contemplation of the combination, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. By operation of the subsequent merger, Zynga will be merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving corporation and as a wholly owned subsidiary of Take-Two. Merger Sub 2’s principal executive offices are located at 110 West 44th Street, New York, New York, 10036, and its telephone number is (646) 536-2842.

 

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THE TAKE-TWO SPECIAL MEETING

This joint proxy statement/prospectus is being provided to Take-Two stockholders in connection with the solicitation of proxies by the Take-Two board of directors for use at the Take-Two special meeting and at any adjournments or postponements thereof. Take-Two stockholders are encouraged to read this entire document carefully, including its annexes and the documents incorporated by reference herein, for more detailed information regarding the merger agreement and the transactions contemplated thereby.

Date, Time and Place of the Take-Two Special Meeting

The Take-Two special meeting is scheduled to be held virtually via live, audio-only webcast on             , 2022, beginning at                 , Eastern Time.

The Take-Two special meeting will be held by means of remote communication via live webcast. There will not be a physical location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Take-Two believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Take-Two board of directors and Take-Two management. Take-Two stockholders will be able to virtually attend and vote at the Take-Two special meeting by visiting                 , which is referred to as the “Take-Two special meeting website.” Take-Two stockholders will need the 16-digit control number found on their proxy card in order to access the Take-Two special meeting website.

Matters to Be Considered at the Take-Two Special Meeting

The purpose of the Take-Two special meeting is to consider and vote on each of the following proposals, each of which is further described in this joint proxy statement/prospectus:

 

   

Take-Two Proposal 1—Take-Two Share Issuance Proposal: To approve the issuance of shares of Take-Two common stock to Zynga stockholders in connection with the combination contemplated by the merger agreement;

 

   

Take-Two Proposal 2—Charter Amendment Proposal: To approve and adopt an amendment to the Take-Two Restated Certificate of Incorporation in connection with the consummation of the combination and the share issuance to increase the number of authorized shares of Take-Two capital stock from 205,000,000 to 305,000,000, of which 300,000,000 shares will be common stock and 5,000,000 shares will be preferred stock;

 

   

Take-Two Proposal 3—Take-Two Adjournment Proposal: To approve the adjournment of the Take-Two special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal and Take-Two charter amendment proposal.

Approval of the Take-Two share issuance proposal and the Take-Two charter amendment proposal by Take-Two stockholders are conditions to the combination. Approval of the Take-Two adjournment proposal is not a condition to the obligation of either Take-Two or Zynga to complete the combination.

Only business within the purposes described in the Take-Two special meeting notice may be conducted at the Take-Two special meeting.

Recommendation of the Take-Two Board of Directors

After careful consideration, the Take-Two board of directors unanimously: (i) 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 (ii) approved the merger agreement

 

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and the transactions contemplated thereby, including the merger, the subsequent merger, and the share issuance. Accordingly, the Take-Two board of directors unanimously recommends that Take-Two’s stockholders vote “FOR” the approval of the Take-Two share issuance proposal, “FOR” the approval of the Take-Two charter amendment proposal and “FOR” the approval of the Take-Two adjournment proposal. See the section titled “The Combination—Take-Two’s Reasons for the Combination and Recommendation of the Take-Two Board of Directors.”

The Take-Two board of directors unanimously recommends that Take-Two stockholders vote:

 

   

Take-Two Proposal 1: FOR” the Take-Two share issuance proposal;

 

   

Take-Two Proposal 2: “FOR” the Take-Two charter amendment proposal; and

 

   

Take-Two Proposal 3: FOR” the Take-Two adjournment proposal.

Record Date for the Take-Two Special Meeting and Voting Rights

The record date to determine Take-Two stockholders who are entitled to receive notice of and to vote at the Take-Two special meeting or any adjournments or postponements thereof is                 , 2022. At the close of business on the Take-Two record date, there were                  shares of Take-Two common stock issued and outstanding and entitled to vote at the Take-Two special meeting.

Each Take-Two stockholder is entitled to one vote on each proposal for each share of Take-Two common stock held of record at the close of business on the Take-Two record date. Only Take-Two stockholders of record at the close of business on the Take-Two record date are entitled to receive notice of and to vote at the Take-Two special meeting and any and all adjournments or postponements thereof.

A complete list of Take-Two stockholders entitled to vote at the Take-Two special meeting will be available for inspection at Take-Two’s headquarters during regular business hours for a period of no less than 10 days before the Take-Two special meeting at 110 West 44th Street, New York, New York, 10036. If Take-Two’s headquarters are closed for health and safety reasons related to the COVID-19 pandemic during such period, the list of Take-Two’s stockholders will be made available for inspection upon request to Take-Two’s corporate secretary at 110 West 44th Street, New York, New York 10036, subject to the satisfactory verification of stockholder status. The list of Take-Two stockholders entitled to vote at the Take-Two special meeting will also be made available for inspection during the Take-Two special meeting via the Take-Two special meeting website.

Quorum; Abstentions and Broker Non-Votes

A quorum of Take-Two stockholders is necessary to conduct business at the Take-Two special meeting. The presence in person or by proxy of the holders of a majority of the issued and outstanding shares of Take-Two common stock entitled to vote at the Take-Two special meeting will constitute a quorum. Shares of Take-Two common stock present at the Take-Two special meeting by virtual attendance via the Take-Two special meeting website or represented by proxy and entitled to vote, including shares for which a Take-Two stockholder directs an “abstention” from voting, will be counted for purposes of determining a quorum. However, because all of the proposals for consideration at the Take-Two special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Take-Two stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals at the Take-Two special meeting. If a quorum is not present, the Take-Two special meeting will be adjourned or postponed until the holders of the number of shares of Take-Two common stock required to constitute a quorum attend.

Under Nasdaq rules, banks, brokers or other nominees who hold shares in “street name” on behalf of the beneficial owner of such shares have the authority to vote such shares in their discretion on certain “routine”

 

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proposals when they have not received voting instructions from the beneficial owners. However, banks, brokers or other nominees are not allowed under Nasdaq rules to exercise their voting discretion with respect to matters that are “non-routine.” This can result in a “broker non-vote,” which occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the bank, broker or other nominee with voting instructions on a “non-routine” matter. All of the proposals for consideration at the Take-Two special meeting are considered “non-routine” matters, and banks, brokers or other nominees will not have discretionary authority to vote on any matter before the Take-Two special meeting. As a result, Take-Two does not expect any broker non-votes at the Take-Two special meeting and if you hold your shares of Take-Two common stock in “street name,” your shares will not be represented and will not be voted on any matter unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instructions provided by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank, broker or other nominee on how to vote. Brokers will not be able to vote on any of the proposals before the Take-Two special meeting unless they have received voting instructions from the beneficial owners.

Required Votes

The vote required to approve each of the proposals listed below assumes the presence of a quorum at the Take-Two special meeting. As described above, Take-Two does not expect there to be any broker non-votes at the Take-Two special meeting.

 

Proposal

  

Required Vote

  

Effects of Certain Actions

Take-Two Proposal 1:
Take-Two share issuance proposal
   Approval 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.    The failure to vote any shares present or represented by proxy at the Take-Two special meeting (including if a stockholder who holds shares in “street name” provides voting instructions for one or more other proposals) but not for the Take-Two share issuance proposal, or abstention from voting will be treated 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.
Take-Two Proposal 2: Take-Two charter amendment proposal    Approval requires the affirmative vote of the holders of Take-Two common stock representing at least a majority of the outstanding shares of Take-Two common stock entitled to vote.    The failure to vote, failure to instruct your bank, broker or other nominee to vote shares held in “street name” with respect to the Take-Two charter amendment proposal, or abstention from voting will be treated as a vote “AGAINST” the Take-Two charter amendment proposal, provided that a quorum is otherwise present at the Take-Two special meeting.

 

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Proposal

  

Required Vote

  

Effects of Certain Actions

Take-Two Proposal 3:
Take-Two adjournment proposal
   Approval requires 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.    The failure to vote any shares present or represented by proxy at the Take-Two special meeting (including if a stockholder who holds shares in “street name” provides voting instructions for one or more other proposals, but not for the Take-Two adjournment proposal), or abstention from voting will be treated as a vote “AGAINST” the Take-Two adjournment proposal.

Vote of Take-Two Directors and Executive Officers

As of                 , 2022, the Take-Two record date, Take-Two directors and executive officers beneficially owned and were entitled to vote in the aggregate                  shares of Take-Two common stock, which represented     % of the Take-Two common stock issued and outstanding on the Take-Two record date, including the shares covered by the voting agreement described below and entered into by and among Take-Two’s executive officers and directors (and certain of their respective affiliates), solely in their capacity as stockholders of Take-Two (the “Take-Two voting agreement”). For more information regarding the Take-Two voting agreement, see the section titled “Voting Agreements.” Pursuant to the voting agreement, Take-Two currently expects that all Take-Two directors and executive officers will vote their shares “FOR” the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal, and “FOR” the Take-Two adjournment proposal. See the section titled “Interests of Take-Two Directors and Executive Officers in the Combination” in this joint proxy statement/prospectus and the arrangements described in Take-Two’s Definitive Proxy Statement on Schedule 14A for Take-Two’s 2021 annual meeting of stockholders, filed with the SEC on July 27, 2021, which is incorporated by reference in this joint proxy statement/prospectus. For more information regarding the Take-Two voting agreement, see the section titled “Voting Agreements.”

Methods of Voting

Stockholders of Record

If you are a Take-Two stockholder of record, you may vote at the Take-Two special meeting by proxy over the internet or telephone or by mail, or by virtually attending and voting at the Take-Two special meeting via the Take-Two special meeting website, as described below.

 

   

By Internet: To vote via the Internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the 16-digit control number from the proxy card you receive. Your vote must be received by 11:59 p.m. Eastern Time on             , 2022 to be counted. If you vote via the Internet, you do not need to return a proxy card by mail.

 

   

By Telephone: To vote by telephone, dial                  (the call is toll-free in the United States and Canada; toll charges apply to calls from other countries) and follow the recorded instructions. You will be asked to provide the 16-digit control number from the proxy card. Your vote must be received by 11:59 p.m., Eastern Time, on             , 2022 to be counted. If you vote by telephone, you do not need to return a proxy card by mail.

 

   

By Mail: To vote by mail using the proxy card (if you requested paper copies of the proxy materials to be mailed to you), you need to complete, date and sign the proxy card and return it promptly by mail in the envelope provided so that it is received no later than             , 2022. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail.

 

   

Virtually via the Take-Two Special Meeting Website: To vote at the Take-Two special meeting, visit                 , where you can virtually attend and vote at the Take-Two special

 

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meeting. You will be asked to provide the 16-digit control number from the proxy card you receive in order to access the Take-Two special meeting website.

Unless revoked, all duly executed proxies representing shares of Take-Two common stock entitled to vote at the Take-Two special meeting will be voted at the Take-Two special meeting and, where a choice has been specified on the proxy card, will be voted in accordance with such specification. If you submit an executed proxy without providing instructions for any proposal, your shares will be voted “FOR” the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal and “FOR” the Take-Two adjournment proposal.

Beneficial (Street Name) Stockholders

If you hold your shares of Take-Two common stock through a bank, broker or other nominee in “street name” instead of as a registered holder, you must follow the voting instructions provided by your bank, broker or other nominee in order to vote your shares. Your voting instructions must be received by your bank, broker or other nominee prior to the deadline set forth in the information from your bank, broker or other nominee on how to submit voting instructions. If you do not provide voting instructions to your bank, broker or other nominee for a proposal, your shares of Take-Two common stock will not be voted on that proposal because your bank, broker or other nominee does not have discretionary authority to vote on any of the proposals to be voted on at the Take-Two special meeting. See the section titled “The Take-Two Special Meeting—Quorum; Abstentions and Broker Non-Votes.”

If you hold your shares of Take-Two common stock through a bank, broker or other nominee in “street name” (instead of as a registered holder), you must obtain a specific control number from your bank, broker or other nominee in order to virtually attend and vote at the Take-Two special meeting via the Take-Two special meeting website. See the section titled “The Take-Two Special Meeting—Virtually Attending the Take-Two Special Meeting.”

Virtually Attending the Take-Two Special Meeting

If you wish to virtually attend the Take-Two special meeting via the Take-Two special meeting website, you must (i) be a Take-Two stockholder of record at the close of business on                 , 2022, the Take-Two record date, (ii) hold your shares of Take-Two common stock beneficially in the name of a broker, bank or other nominee as of the Take-Two record date or (iii) hold a valid proxy for the Take-Two special meeting.

To enter the Take-Two special meeting website and virtually attend the Take-Two special meeting, you will need the 16-digit control number located on your proxy card. If you hold your shares of Take-Two common stock in street name beneficially through a broker, bank or other nominee and you wish to virtually attend the Take-Two special meeting via the Take-Two special meeting website, you will need to obtain your specific control number and further instructions from your bank, broker or other nominee. The 16-digit control number is also needed to access the list of Take-Two stockholders entitled to vote at the Take-Two special meeting during the time of the meeting.

If you plan to virtually attend and vote at the Take-Two special meeting via the Take-Two special meeting website, Take-Two still encourages you to vote in advance by the internet, telephone or (if you received a paper copy of the proxy materials) by mail so that your vote will be counted even if you later decide not to virtually attend the Take-Two special meeting via the Take-Two special meeting website. Voting your proxy by the internet, telephone or mail will not limit your right to virtually attend and vote at the Take-Two special meeting via the Take-Two special meeting website if you later decide to do so.

 

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Revocability of Proxies

Any Take-Two stockholder giving a proxy has the right to revoke it at any time before the proxy is voted at the Take-Two special meeting. If you are a Take-Two stockholder of record, you may revoke your proxy by any one of the following actions:

 

   

by sending a signed written notice of revocation to Take-Two’s Corporate Secretary, provided such notice is received no later than the close of business on                , 2022;

 

   

by voting again over the internet or telephone as instructed on your proxy card before the closing of the voting facilities at 11:59 p.m., Eastern Time, on                , 2022;

 

   

by submitting a properly signed and dated proxy card with a later date that is received by Take-Two’s Corporate Secretary no later than the close of business on                , 2022; or

 

   

by virtually attending the Take-Two special meeting via the Take-Two special meeting website and requesting that your proxy be revoked, or virtually voting via the Take-Two special meeting website as described above.

Only your last submitted proxy will be considered.

Execution or revocation of a proxy will not in any way affect a Take-Two stockholder’s right to virtually attend and vote at the Take-Two special meeting via the Take-Two special meeting website.

Written notices of revocation and other communications relating to the revocation of proxies should be addressed to:

Take-Two Interactive Software, Inc.

Attn: Corporate Secretary

110 West 44th Street

New York, New York 10036

If your shares of Take-Two common stock are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions. You may also change your vote by obtaining your specific control number and instructions from your bank, broker or other nominee and voting your shares at the Take-Two special meeting via the Take-Two special meeting website.

Proxy Solicitation Costs

Take-Two is soliciting proxies on behalf of the Take-Two board of directors. Take-Two will bear the entire cost of soliciting proxies from Take-Two stockholders. Proxies may be solicited on behalf of Take-Two or by Take-Two directors, officers and other employees in person or by mail, telephone, facsimile, messenger, the internet or other means of communication, including electronic communication. Take-Two directors, officers and employees will not be paid any additional amounts for their services or solicitation in this regard.

Take-Two will request that banks, brokers and other nominee record holders send proxies and proxy material to the beneficial owners of Take-Two common stock and secure their voting instructions, if necessary. Take-Two may be required to reimburse those banks, brokers and other nominees on request for their reasonable expenses in taking those actions.

Take-Two has also retained MacKenzie Partners to assist in soliciting proxies and in communicating with Take-Two stockholders and estimates that it will pay MacKenzie Partners a fee of approximately $125,000, plus reimbursement for certain out-of-pocket fees and expenses. Take-Two also has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

 

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Householding

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Take-Two has previously adopted householding for Take-Two stockholders of record. As a result, Take-Two stockholders with the same address and last name may receive only one copy of this joint proxy statement/prospectus. Registered Take-Two stockholders (those who hold shares of Take-Two common stock directly in their name with Take-Two’s transfer agent) may opt out of householding and receive a separate joint proxy statement/prospectus or other proxy materials by sending a written request to Take-Two at the address below.

Some brokers household proxy materials, delivering a single proxy statement or notice to multiple Take-Two stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker.

Take-Two will promptly deliver a copy of this joint proxy statement/prospectus to any Take-Two stockholder who only received one copy of these materials due to householding upon request in writing to: Take-Two Interactive Software, Inc., Attn: Corporate Secretary, 110 West 44th Street, New York, New York, 10036 or by calling (646) 536-2842.

Adjournments

If a quorum is present at the Take-Two special meeting but there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal, then Take-Two stockholders may be asked to vote on the Take-Two adjournment proposal. If a quorum is not present, the presiding officer may adjourn the special meeting, from time to time, without notice other than announcement at the meeting of the hour, date and place, if any, to which the meeting is adjourned, and the means of remote communications, if any, by which Take-Two stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting. The presiding officer may also adjourn the meeting to another hour, date or place, even if a quorum is present.

At any subsequent reconvening of the Take-Two special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting, and all proxies will be voted in the same manner as they would have been voted at the original convening of the Take-Two special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

 

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Assistance

If you need assistance voting or completing your proxy card, or if you have questions regarding the Take-Two special meeting, please contact MacKenzie Partners, Take-Two’s proxy solicitor for the Take-Two special meeting, at:

 

LOGO

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

TAKE-TWO STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/ PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE COMBINATION. IN PARTICULAR, TAKE-TWO STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

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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 to Zynga stockholders in connection with the combination for purposes of applicable Nasdaq rules. Based on the number of shares of Zynga common stock outstanding as of                , the latest practicable date prior to the date of this joint proxy statement/prospectus, Take-Two expects to issue approximately                million shares of Take-Two common stock to Zynga stockholders in connection with the combination. The actual number of shares of Take-Two common stock to be issued 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                , the latest practicable date prior to the date of this joint proxy statement/prospectus, upon completion of the combination, the current Take-Two stockholders are expected to own approximately    % of the outstanding shares of Take-Two common stock and former Zynga stockholders are expected to own approximately    % 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

 

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TAKE-TWO PROPOSAL 2: AMENDMENT TO THE TAKE-TWO CHARTER

In accordance with the merger agreement, Take-Two is seeking to approve and adopt an amendment to the Take-Two Restated Certificate of Incorporation in connection with the consummation of the combination and the share issuance to increase the number of authorized shares of Take-Two capital stock from 205,000,000 to 305,000,000 of which 300,000,000 shares will be common stock and 5,000,000 shares will be preferred stock. The form of the proposed amendment is attached as Annex E to this joint proxy statement/prospectus. These additional authorized shares will provide Take-Two with a sufficient number of authorized shares to complete the combination and have additional authorized shares for future strategic business decisions as determined by the Take-Two board of directors. If the Take-Two charter amendment proposal is approved, but the combination is not completed for any reason, Take-Two’s board of directors may choose, in its discretion, to implement the Take-Two charter amendment proposal.

All newly authorized shares of Take-Two common stock would have the same rights as the presently authorized shares of Take-Two common stock, including the right to cast one vote per share and to participate in dividends when and to the extent declared and paid. A number of additional shares of authorized Take-Two common stock are expected to be issued in connection with the combination, and the issuance of additional shares of authorized Take-Two common stock would be within the discretion of the board of directors of Take-Two, without the requirement of further action by stockholders unless such action is required under applicable law or the rules of any stock exchange on which Take-Two’s securities then may be listed. Requiring the stockholders to meet and approve each separate issuance of additional common stock would be time consuming and costly. Moreover, if stockholder authorization of additional common stock were postponed until a specific need arose, the delay could, in some instances, deprive Take-Two and its stockholders of opportunities otherwise available.

The Take-Two board of directors, after careful consideration, unanimously determined that the Take-Two charter amendment proposal, on the terms and conditions set forth in the form of proposed amendment attached as Annex E to this joint proxy statement/prospectus are advisable and fair to, and in the best interests of, Take-Two and its stockholders, and approved that the Take-Two charter proposal amendment be submitted to the Take-Two stockholders for approval.

The Take-Two board of directors unanimously recommends that Take-Two stockholders vote “FOR” the Take-Two charter amendment proposal.

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two charter amendment proposal requires the affirmative vote of the holders of Take-Two common stock representing at least a majority of the outstanding shares of Take-Two common stock entitled to vote thereon. If a Take-Two stockholder fails to vote, fails to instruct its bank, broker, or other nominee to vote with respect to the Take-Two charter amendment proposal, or abstains from voting, it will have the same effect as a vote “AGAINST” the Take-Two charter amendment proposal.

THE TAKE-TWO BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TAKE-TWO STOCKHOLDERS VOTE “FOR” THE TAKE-TWO CHARTER AMENDMENT PROPOSAL

 

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TAKE-TWO PROPOSAL 3: ADJOURNMENT OF THE TAKE-TWO SPECIAL MEETING

The Take-Two special meeting may be adjourned to another time and place if necessary or appropriate to permit the solicitation of additional proxies if there are insufficient votes at the time of the Take-Two special meeting to approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal.

Take-Two is asking Take-Two stockholders to authorize the holder of any proxy solicited by the Take-Two board of directors to vote in favor of any adjournment of the Take-Two special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal.

The Take-Two board of directors unanimously recommends that Take-Two stockholders vote “FOR” the Take-Two adjournment proposal.

Assuming a quorum is present at the Take-Two special meeting, approval of the Take-Two adjournment proposal requires 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. 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 adjournment 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 have the same effect as a vote “AGAINST” the Take-Two adjournment proposal. 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 adjournment proposal, it will have the same effect as a vote “AGAINST” the Take-Two adjournment proposal.

THE TAKE-TWO BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TAKE-TWO STOCKHOLDERS VOTE “FOR” THE TAKE-TWO ADJOURNMENT PROPOSAL

 

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THE ZYNGA SPECIAL MEETING

This joint proxy statement/prospectus is being provided to Zynga stockholders in connection with the solicitation of proxies by the Zynga board of directors for use at the Zynga special meeting and at any adjournments or postponements thereof. Zynga stockholders are encouraged to read this entire document carefully, including its annexes and the documents incorporated by reference herein, for more detailed information regarding the merger agreement and the transactions contemplated thereby.

Date, Time and Place of the Zynga Special Meeting

The Zynga special meeting is scheduled to be held virtually via live webcast on                , 2022, beginning at                , Pacific Time.

The Zynga special meeting will be held solely by means of remote communication via live webcast. There will not be a physical location. In light of continuing public health and travel concerns arising from the coronavirus (COVID-19) outbreak, Zynga believes hosting a virtual meeting helps ensure the health and safety of its stockholders, the Zynga board of directors and Zynga management. Zynga stockholders will be able to virtually attend and vote at the Zynga special meeting by visiting                , which is referred to as the “Zynga special meeting website.”

Matters to Be Considered at the Zynga Special Meeting

The purpose of the Zynga special meeting is to consider and vote on each of the following proposals, each of which is further described in this joint proxy statement/prospectus:

 

   

Zynga Proposal 1—Adoption of the Merger Agreement: To adopt the merger agreement;

 

   

Zynga Proposal 2Approval, on an Advisory Non-Binding Basis, of Certain Merger- Related Compensatory Arrangements with Zynga’s Named Executive Officers: To approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement; and

 

   

Zynga Proposal 3Adjournment of the Zynga Special Meeting: To approve the adjournment of the Zynga special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Zynga special meeting to approve the Zynga merger proposal.

Approval of the Zynga merger proposal by Zynga stockholders is a condition to the combination. Approval of the advisory Zynga compensation proposal and the Zynga adjournment proposal are not conditions to the obligation of either Take-Two or Zynga to complete the combination.

Only business within the purposes described in the Zynga special meeting notice may be conducted at the Zynga special meeting.

Recommendation of the Zynga Board of Directors

After careful consideration, the Zynga board of directors unanimously: (i) determined that the merger agreement, the combination and the other transactions contemplated by the merger agreement were fair to, advisable and in the best interests of Zynga and its stockholders; (ii) adopted and approved the merger agreement, the combination and the other transactions contemplated by the merger agreement; and (iii) recommended that Zynga stockholders adopt the merger agreement. Accordingly, the Zynga board of directors unanimously recommends that Zynga stockholders vote “FOR” the Zynga merger proposal, “FOR” the Zynga compensation

 

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proposal and “FOR” the Zynga adjournment proposal. See the section titled “The Combination—Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors.”

The Zynga board of directors unanimously recommends that Zynga stockholders vote:

 

   

Zynga Proposal 1: “FOR” the Zynga merger proposal;

 

   

Zynga Proposal 2: “FOR” the Zynga compensation proposal; and

 

   

Zynga Proposal 3: “FOR” the Zynga adjournment proposal.

Record Date for the Zynga Special Meeting and Voting Rights

The record date to determine Zynga stockholders who are entitled to receive notice of and to vote at the Zynga special meeting or any adjournments or postponements thereof is                 , 2022. At the close of business on the Zynga record date, there were                shares of Zynga common stock issued and outstanding and entitled to vote at the Zynga special meeting.

Each Zynga stockholder is entitled to one vote on each proposal for each share of Zynga common stock held of record at the close of business on the Zynga record date. Only Zynga stockholders of record at the close of business on the Zynga record date are entitled to receive notice of and to vote at the Zynga special meeting and any and all adjournments or postponements thereof.

Quorum; Abstentions and Broker Non-Votes

A quorum of Zynga stockholders is necessary to conduct business at the Zynga special meeting. The presence, in person or by proxy of the holders of a majority of the voting power of the shares of Zynga common stock entitled to vote at the Zynga special meeting will constitute a quorum. Shares of Zynga common stock present at the Zynga special meeting by virtual attendance via the Zynga special meeting website or represented by proxy and entitled to vote, including shares for which a Zynga stockholder directs an “abstention” from voting, will be counted for purposes of determining a quorum. However, because all of the proposals for consideration at the Zynga special meeting are considered “non-routine” matters, shares held in “street name” will not be counted as present for the purpose of determining the existence of a quorum unless the Zynga stockholder provides their bank, broker or other nominee with voting instructions for at least one of the proposals at the Zynga special meeting. If a quorum is not present, the Zynga special meeting will be adjourned or postponed until the holders of the number of shares of Zynga common stock required to constitute a quorum attend.

Under Nasdaq rules, banks, brokers or other nominees who hold shares in “street name” on behalf of the beneficial owner of such shares have the authority to vote such shares in their discretion on certain “routine” proposals when they have not received voting instructions from the beneficial owners. However, banks, brokers or other nominees are not allowed under Nasdaq rules to exercise their voting discretion with respect to matters that are “non-routine.” This can result in a “broker non-vote,” which occurs on a proposal when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares, and (ii) the beneficial owner fails to provide the bank, broker or other nominee with voting instructions on a “non-routine” matter. All of the proposals for consideration at the Zynga special meeting are considered “non-routine” matters, and banks, brokers or other nominees will not have discretionary authority to vote on any matter before the Zynga special meeting. As a result, Zynga does not expect any broker non-votes at the Zynga special meeting and if you hold your shares of Zynga common stock in “street name,” your shares will not be represented and will not be voted on any matter unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instructions provided by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank,

 

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broker or other nominee on how to vote. Brokers will not be able to vote on any of the proposals before the Zynga special meeting unless they have received voting instructions from the beneficial owners.

Required Votes

The vote required to approve each of the proposals listed below assumes the presence of a quorum at the Zynga special meeting. As described above, Zynga does not expect there to be any broker non-votes at the Zynga special meeting.

 

Proposal

  

Required Vote

  

Effects of Certain Actions

Zynga Proposal 1: Zynga merger proposal    Approval requires the affirmative vote of a majority of the outstanding shares of Zynga common stock entitled to vote at the close of business on the Zynga record date.    The failure to vote, the failure to instruct your brokerage firm, bank, dealer or other similar organization, trustee, or nominee to vote shares held in “street name” on the Zynga merger proposal or an abstention from voting will have the same effect as a vote “AGAINST” the Zynga merger proposal.
Zynga Proposal 2: Zynga compensation proposal    Approval requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the Zynga special meeting.    Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga compensation 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 Zynga compensation proposal will have the same effect as a vote “AGAINST” the Zynga compensation proposal. In addition, if a Zynga 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 Zynga compensation proposal, it will have the same effect as a vote “AGAINST” the Zynga compensation proposal.
Zynga Proposal 3: Zynga adjournment proposal    Approval requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the Zynga special meeting.    Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga adjournment proposal, provided that a quorum is otherwise present. An abstention or other failure of any shares present or represented by

 

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Proposal

  

Required Vote

  

Effects of Certain Actions

      proxy to vote on the Zynga adjournment proposal will have the same effect as a vote “AGAINST” the Zynga adjournment proposal. In addition, if a Zynga 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 Zynga adjournment proposal, it will have the same effect as a vote “AGAINST” the Zynga adjournment proposal.

Vote of Zynga Directors and Executive Officers

As of                 , 2022, the Zynga record date, Zynga directors and executive officers beneficially owned and were entitled to vote in the aggregate                shares of Zynga common stock, including                shares of Zynga common stock covered by the voting agreements described in the section titled “Voting Agreements,” which represented                % of the Zynga common stock issued and outstanding on the Zynga record date, including the shares covered by the voting agreements described below and entered into by and among Zynga’s executive officers and directors (and certain of their respective affiliates), solely in their capacity as stockholders of Zynga (the “Zynga voting agreements”). For more information regarding the Zynga voting agreements, see the section titled “Voting Agreements.”

Pursuant to the voting agreements, Zynga currently expects that all Zynga directors and Zynga officers will vote their shares “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal. See the section titled “Interests of Zynga Directors and Executive Officers in the Combination” in this joint proxy statement/prospectus and the arrangements described in Zynga’s Definitive Proxy Statement on Schedule 14A for Zynga’s 2021 annual meeting of stockholders, filed with the SEC on May 17, 2021, which is incorporated by reference in this joint proxy statement/prospectus.

Methods of Voting

Stockholders of Record

If you are a Zynga stockholder of record, you may vote at the Zynga special meeting by proxy through the internet, by mail, or by virtually attending and voting at the Zynga special meeting via the Zynga special meeting website, as described below.

 

   

By Internet Before the Meeting: To vote via the Internet, go to www.voteproxy.com to complete an electronic proxy card. You will be asked to provide the Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials. Your vote must be received by 11:59 p.m. Eastern Time on                 , 2022 to be counted. If you vote via the Internet, you do not need to return a proxy card by mail.

 

   

By Mail: To vote by mail using the proxy card, you need to complete, date and sign the proxy card and return it promptly by mail in the envelope provided so that it is received no later than                 , 2022. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail.

 

   

Virtually via the Zynga Special Meeting Website: To attend and vote at the Zynga special meeting, visit the Zynga special meeting website. Please have your Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials to join the special meeting as a stockholder.

 

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Unless revoked, all duly executed proxies representing shares of Zynga common stock entitled to vote at the Zynga special meeting will be voted at the Zynga special meeting and, where a choice has been specified on the proxy card, will be voted in accordance with such specification. If you submit an executed proxy without providing instructions for any proposal, your shares will be voted “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal and “FOR” the Zynga adjournment proposal. Zynga does not expect that any matter other than the proposals listed above will be brought before the Zynga special meeting.

Beneficial (Street Name) Stockholders

If you hold your shares of Zynga common stock through a bank, broker or other nominee in “street name” instead of as a registered holder, you must follow the voting instructions provided by your bank, broker or other nominee in order to vote your shares. Your voting instructions must be received by your bank, broker or other nominee prior to the deadline set forth in the information from your bank, broker or other nominee on how to submit voting instructions. If you do not provide voting instructions to your bank, broker or other nominee for a proposal, your shares of Zynga common stock will not be voted on that proposal because your bank, broker or other nominee does not have discretionary authority to vote on any of the proposals to be voted on at the Zynga special meeting. See the section titled “—Quorum; Abstentions and Broker Non-Votes.”

If you hold shares in “street name” through a bank, broker or other nominee and intend to vote your shares online during the Zynga special meeting, you must request and obtain a valid “legal proxy” from your bank, broker or other nominee and register to attend the Zynga special meeting as a stockholder with American Stock Transfer & Trust Company LLC. See the section titled “—Virtually Attending the Zynga Special Meeting.”

Virtually Attending the Zynga Special Meeting

If you wish to virtually attend the Zynga special meeting via the Zynga special meeting website, you must (i) be a Zynga stockholder of record at the close of business on                 , 2022, which is referred to as the “Zynga record date,” (ii) hold your shares of Zynga common stock beneficially in the name of a broker, bank or other nominee as of the Zynga record date or (iii) hold a valid proxy for the Zynga special meeting.

If you are a stockholder of record, to virtually attend and vote at the Zynga special meeting, you will need the Voter Control Number issued by American Stock Transfer & Trust Company LLC included with your proxy materials. If you are a stockholder of record, you do not need to register with American Stock Transfer & Trust Company, LLC to attend and vote at the Zynga special meeting.

If you hold your shares in “street name” beneficially through a bank, broker or other nominee, you may virtually attend as a guest. If you hold shares in “street name” through a bank, broker or other nominee and intend to vote your shares online during the Zynga special meeting the Zynga special meeting, you must request and obtain a valid “legal proxy” from your bank, broker or other nominee and register to attend the Zynga special meeting as a stockholder with American Stock Transfer & Trust Company LLC.

After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Zynga special meeting as a stockholder, you must submit proof of your legal proxy reflecting the number of your shares, along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests can be mailed to:

American Stock Transfer & Trust Company LLC

Attn: Proxy Tabulation Department

6201 15th Avenue | Brooklyn, NY 11219

Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00p.m., Eastern Time, on             , 2022.You will receive a confirmation of your registration by email after your registration materials are received.

 

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If you plan to virtually attend and vote at the Zynga special meeting via the Zynga special meeting website, Zynga still encourages you to vote in advance by the internet or by mail so that your vote will be counted even if you later decide not to virtually attend the Zynga special meeting via the Zynga special meeting website. Voting your proxy by the internet or mail will not limit your right to virtually attend and vote at the Zynga special meeting via the Zynga special meeting website if you later decide to do so.

 

Revocability of Proxies

Any Zynga stockholder giving a proxy has the right to revoke it at any time before the proxy is voted at the Zynga special meeting. If you are a Zynga stockholder of record, you may revoke your proxy by any of the following actions:

 

   

by sending a signed written notice of revocation to Zynga’s Corporate Secretary, provided such notice is received no later than the close of business on                , 2022;

 

   

by voting again over the internet as instructed on your proxy card before the closing of the voting facilities at                , on                , 2022;

 

   

by submitting a properly signed and dated proxy card with a later date that is received by Zynga’s Corporate Secretary no later than the close of business on                , 2022; or

 

   

by virtually attending and voting at the Zynga special meeting via the Zynga special meeting website as described above.

Only your last submitted proxy will be considered.

Execution or revocation of a proxy will not in any way affect a Zynga stockholder’s right to virtually attend and vote at the Zynga special meeting via the Zynga special meeting website.

Written notices of revocation and other communications relating to the revocation of proxies should be addressed to:

Zynga Inc.

Attention: Office of the Corporate Secretary

c/o Legal Department

699 Eighth Street

San Francisco, California 94103

(855) 449-9642

If your shares of Zynga common stock are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions. You may also change your vote by obtaining your specific control number and instructions from your brokerage firm, bank, dealer or other similar organization, trustee, or nominee and voting your shares at the Zynga special meeting via the Zynga special meeting website.

Proxy Solicitation Costs

Zynga is soliciting proxies on behalf of the Zynga board of directors. Zynga will bear the entire cost of soliciting proxies from Zynga stockholders. Proxies may be solicited on behalf of Zynga or Zynga directors, officers and other employees in person or by mail, telephone, facsimile, messenger, the internet or other means of communication, including electronic communication. Zynga directors, officers and employees will not be paid any additional amounts for their services or solicitation in this regard.

Zynga will request that banks, brokers and other nominee record holders send proxies and proxy material to the beneficial owners of Zynga common stock and secure their voting instructions, if necessary. Zynga may be required to reimburse those banks, brokers and other nominees on request for their reasonable expenses in taking those actions.

 

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Zynga has also retained D.F. King & Co., Inc. to assist in soliciting proxies and in communicating with Zynga stockholders and estimates that it will pay D.F. King & Co. a fee of approximately $50,000, plus reimbursement for certain out-of-pocket fees and expenses. Zynga also has agreed to indemnify D.F. King & Co. against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Householding

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Zynga has previously adopted householding for Zynga stockholders of record. As a result, Zynga stockholders with the same address and last name may receive only one copy of this joint proxy statement/prospectus. Registered Zynga stockholders (those who hold shares of Zynga common stock directly in their name with Zynga’s transfer agent) may opt out of householding and receive a separate joint proxy statement/prospectus or other proxy materials by sending a written request to Zynga at the address below.

Some brokers also household proxy materials, delivering a single proxy statement or notice to multiple Zynga stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker.

Zynga will promptly deliver a copy of this joint proxy statement/prospectus to any Zynga stockholder who received only one copy of these materials due to householding upon request in writing to: Zynga Inc., Attn: Investor Relations Department, 699 Eighth Street, San Francisco, California 94103 or by emailing investors@zynga.com.

Adjournments

If a quorum is present at the Zynga special meeting but there are insufficient votes at the time of the Zynga special meeting to approve the Zynga merger proposal, then Zynga stockholders may be asked to vote on the Zynga adjournment proposal. If a quorum is not present, the chairperson of the special meeting or holders of a majority of the voting power of the shares present in person or represented by proxy at the meeting, may adjourn the special meeting, from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. The chairperson of the special meeting or holders of a majority of the voting power of the shares present in person or represented by proxy at the meeting may also adjourn the meeting to another place, if any, date or time, even if a quorum is present.

At any subsequent reconvening of the Zynga special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Zynga special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

 

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Assistance

If you need assistance voting or completing your proxy card, or if you have questions regarding the Zynga special meeting, please contact D.F. King & Co., Zynga’s proxy solicitor for the Zynga special meeting, at:

 

LOGO

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Stockholders may call toll free: (800) 714-3310

Banks and Brokers may call: (212) 269-5550

ZNGA@dfking.com

ZYNGA STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE COMBINATION. IN PARTICULAR, ZYNGA STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

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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

 

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ZYNGA PROPOSAL 2: ADVISORY NON-BINDING VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, Zynga is required to submit to a non-binding advisory stockholder vote certain compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the combination as disclosed in the section titled “Interests of Zynga Directors and Executive Officers in the Combination.” The Zynga compensation proposal gives Zynga stockholders the opportunity to express their views on the merger-related compensation of Zynga named executive officers.

Accordingly, Zynga is asking Zynga stockholders to vote “FOR” the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that may be paid or become payable to Zynga named executive officers that is based on or otherwise relates to the merger, as disclosed pursuant to Item 402(t) of Regulation S-K under the heading “Interests of Zynga Directors and Executive Officers in the Combination—Quantification of Payments and Benefits to Zynga Named Executive Officers—Golden Parachute Compensation,” including the associated narrative discussion and the agreements, plans, arrangements or understandings pursuant to which such compensation may be paid or become payable, are hereby APPROVED.”

Approval of the Zynga compensation proposal is not a condition to the obligation of either Take-Two or Zynga to complete the combination. The vote on the Zynga compensation proposal is a vote separate and apart from the vote to adopt the merger agreement. Accordingly, if you are a Zynga stockholder, you may vote to approve the Zynga merger proposal and vote not to approve the Zynga compensation proposal, and vice versa. The vote on the Zynga compensation proposal is advisory and non-binding. As a result, if the combination is completed, the merger-related compensation may be paid to Zynga named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if Zynga stockholders do not approve the Zynga compensation proposal.

The Zynga board of directors unanimously recommends that Zynga stockholders vote “FOR” the Zynga compensation proposal.

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga compensation proposal requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga compensation 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 Zynga compensation proposal will have the same effect as a vote “AGAINST” the Zynga compensation proposal. In addition, if a Zynga 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 Zynga compensation proposal, it will have the same effect as a vote “AGAINST” the Zynga compensation proposal.

THE ZYNGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ZYNGA STOCKHOLDERS VOTE “FOR” THE ZYNGA COMPENSATION PROPOSAL

 

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ZYNGA PROPOSAL 3: ADJOURNMENT OF THE ZYNGA SPECIAL MEETING

The Zynga special meeting may be adjourned to another time and place if necessary or appropriate in order to permit the solicitation of additional proxies if there are insufficient votes to approve the Zynga merger proposal.

Zynga is asking Zynga stockholders to authorize the holder of any proxy solicited by the Zynga board of directors to vote in favor of any adjournment of the Zynga special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Zynga merger proposal.

Approval of the Zynga adjournment proposal is not a condition to the obligation of either Take-Two or Zynga to complete the combination.

The Zynga board of directors unanimously recommends that Zynga stockholders approve the proposal to adjourn the Zynga special meeting, if necessary or appropriate.

Assuming a quorum is present at the Zynga special meeting, approval of the Zynga adjournment proposal requires the affirmative vote of a majority of the voting power of the Zynga common stock present, including by remote communication, or represented by proxy at the meeting and entitled to vote thereon. Any shares not present or represented by proxy (including due to the failure of a Zynga 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 Zynga special meeting to such bank, broker or other nominee) will have no effect on the outcome of the Zynga adjournment 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 Zynga adjournment proposal will have the same effect as a vote “AGAINST” the Zynga adjournment proposal. In addition, if a Zynga 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 Zynga adjournment proposal, it will have the same effect as a vote “AGAINST” the Zynga adjournment proposal.

THE ZYNGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ZYNGA STOCKHOLDERS VOTE “FOR” THE ZYNGA ADJOURNMENT PROPOSAL

 

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THE COMBINATION

The following is a description of material aspects of the combination. While Take-Two and Zynga believe that the following description covers the material terms of the combination, the description may not contain all of the information that is important to you. You are encouraged to read carefully this entire joint proxy statement/ prospectus, including the text of the merger agreement attached as Annex A hereto, for a more complete understanding of the combination. In addition, important business and financial information about each of Take-Two and Zynga is contained or incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information.”

General

Take-Two, Merger Sub 1, Merger Sub 2 and Zynga have entered into the merger agreement, which provides for the acquisition of Zynga by Take-Two through a merger of Merger Sub 1 with and into Zynga (the “merger”), 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 (the “subsequent merger” and together with the merger, the “combination”). As a result of the combination, the separate existence of Zynga and Merger Sub 1 will cease and Merger Sub 2 will continue its existence under the DGCL as the surviving corporation and as a wholly owned subsidiary of Take-Two. The surviving corporation will be named Zynga Inc.

Merger Consideration

If the combination is completed, each issued and outstanding share of Zynga common stock, 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.

As noted above, the number of shares of Take-Two common stock that Zynga stockholders will receive as consideration in the combination is not fixed and may change. The exchange ratio is not fixed within the two-way collar and will be adjusted for changes in the market price of Take-Two common stock prior to the effective time of the combination if the Take-Two common stock price is an amount equal to or between $156.50 and $181.88. In addition, the market value of the consideration payable to Zynga stockholders in the combination will fluctuate with the market price of Take-Two common stock if the Take-Two common stock price is an amount less than $156.50 or greater than $181.88. Based on the closing price of Take-Two common stock on Nasdaq of $                on                , the latest practicable trading day prior to the date of the accompanying joint proxy statement/prospectus, the exchange ratio is                  and the implied value of the consideration payable to Zynga stockholders in the combination was approximately $                per share of Zynga common stock. The Take-Two common stock price and the exchange ratio will not be determinable until the third trading day immediately preceding the closing date of the combination. The market price of shares of Take-Two common stock that Zynga stockholders receive at the time the combination is completed could be greater than, less than or

 

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the same as the market price of shares of Take-Two common stock on the date of this joint proxy statement/prospectus or on the date of the Take-Two special meeting and the Zynga special meeting. Accordingly, you should obtain current market quotations for Take-Two common stock and Zynga common stock before deciding how to vote on the Take-Two share issuance proposal, Take-Two charter amendment proposal and the Zynga merger proposal, as applicable. Take-Two common stock and Zynga common stock are traded on Nasdaq, under the symbols “TTWO” and “ZNGA,” respectively. Shares of Take-Two common stock will continue trading on Nasdaq under the symbol “TTWO” after completion of the combination.

Background of the Combination

The Zynga board of directors regularly evaluates Zynga’s strategic direction and ongoing business plans with a view toward strengthening Zynga’s business and enhancing stockholder value. As part of this evaluation, the Zynga board of directors has, from time to time, considered a variety of strategic alternatives. These have included, among others, (1) the continuation of, and potential improvements to, Zynga’s current business plan, including the investment in, and development of, new products, services and game titles, with Zynga remaining an independent entity; (2) capital allocation initiatives; (3) potential expansion opportunities through acquisitions, partnerships or other commercial relationships, including the continuation of Zynga’s strategy of acquiring smaller game studios; and (4) business combinations and other financial and strategic alternatives, including the sale of Zynga. The Zynga board of directors was also aware of the accelerating pace of consolidation in the interactive entertainment industry.

As active participants in the interactive entertainment industry with complementary product offerings, Zynga and Take-Two are well known to each other. From time to time, members of Zynga management have met with members of Take-Two management to discuss their industry and their respective companies. At various points in the past, Take-Two expressed non-specific interest in acquiring Zynga, including in January 2021, after Take-Two management had met with its financial advisors and board of directors. These discussions were general in nature and never advanced beyond preliminary, hypothetical conversations.

In February 2021, Frank Gibeau, Zynga’s Chief Executive Officer, and Bernard Kim, Zynga’s President of Publishing, met with senior executives of a strategic acquirer (which is referred to as “Party A”) at Party A’s request. Those present at the meeting discussed Zynga’s business operations and industry and the potential for Zynga to benefit from certain of Party A’s complementary products and service offerings, as well as ways that Zynga and Party A could work together. In the months that followed, Messrs. Gibeau and Kim met several additional times with senior executives of Party A to discuss these topics. At various points during these discussions, senior executives of Party A expressed general interest in an acquisition of Zynga by Party A. However, Party A did not make a specific acquisition proposal. Messrs. Gibeau and Kim kept the Zynga board of directors updated about their discussions with Party A.

By September 2021, Party A had begun to express greater interest in exploring an acquisition of Zynga, including by requesting a formal management presentation regarding Zynga’s business and prospects. In response, in late September 2021, Mr. Gibeau and other members of Zynga management spoke with representatives of Goldman Sachs about Party A and its interest in a possible acquisition of Zynga. During this conversation, the parties also discussed, in general terms, (1) the nature of the strategic alternatives that could be available to Zynga should it elect to pursue a strategic review process; (2) the broad outlines of a process that Zynga could engage in to evaluate its strategic alternatives; and (3) the possibility that Goldman Sachs could serve as Zynga’s financial advisor. Goldman Sachs is well known to Zynga and Zynga management given Goldman Sachs’ qualifications, extensive expertise, international reputation, knowledge of the industry in which Zynga operates, and experience in advising similar companies in connection with potential strategic transactions. In addition, representatives from Goldman Sachs had from time-to-time presented to the Zynga board of directors and Zynga management about public market perspectives of Zynga, as well as strategic opportunities within the interactive entertainment industry. In particular, representatives from Goldman Sachs presented to the Zynga board of directors in February 2021 regarding valuation trends and drivers in the interactive entertainment industry, as well as about

 

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potential acquisition targets for Zynga, strategic partnership opportunities, and potential acquirers of some or all of Zynga.

In late September 2021, Messrs. Gibeau and Kim met with senior executives of a strategic acquirer (which is referred to as “Party B”) at Party B’s request. During this meeting, Party B expressed non-specific interest in an acquisition of Zynga. Party B did not make a formal acquisition proposal in this discussion. A few days after this meeting, senior executives of Party B suggested that Party B’s chief executive officer should meet with Mr. Gibeau to further discuss Party B’s perspectives on a potential acquisition of Zynga.

On October 4, 2021, the Zynga board of directors met, with members of Zynga management and representatives of Wilson Sonsini Goodrich & Rosati, Professional Corporation (which is referred to as “Wilson Sonsini”), outside legal counsel to Zynga, in attendance. Mr. Gibeau reviewed for the Zynga board of directors the nature of discussions with Party A and Party B, including Party A’s desire to meet with Zynga management to better understand Zynga’s business and strategy. Mr. Gibeau reminded the Zynga board of directors of historical discussions between Zynga and Take-Two, which discussions included Take-Two’s non-specific interest in acquiring Zynga prior to October 2021. The representatives of Wilson Sonsini reviewed with the members of the Zynga board of directors their fiduciary duties. It was the consensus of the Zynga board of directors that Zynga management should agree to Party A’s request for a management presentation, and that Mr. Gibeau should continue discussions with Party A. Given Party A’s prior non-specific expressions of interest in an acquisition of Zynga, the Zynga board of directors was aware that the meeting with Party A had the potential to lead to a substantive proposal by Party A to acquire Zynga. As result, the Zynga board of directors also discussed various ways in which Zynga could undertake a review of its strategic alternatives. To provide assistance to, and oversight of, Zynga management, the Zynga board of directors established a strategic committee (which we refer to as the “Strategic Committee”). The Strategic Committee was formed in the light of (1) the potentially significant workload that could be involved in any decision by Zynga to evaluate strategic alternatives; (2) the possibility that Zynga management may need feedback and direction on relatively short notice; and (3) the benefits and convenience of having a subset of directors oversee any process of considering strategic alternatives. The Zynga board of directors authorized and instructed the Strategic Committee to, among other things, (1) oversee and provide assistance to Zynga management and its advisors with respect to the exploration, evaluation, consideration, review and negotiation of the terms and conditions of any strategic alternative, including any sale of Zynga; (2) take such other actions with respect to any strategic alternative as the Strategic Committee deemed necessary, appropriate or advisable; and (3) recommend what action, if any, that the Zynga board of directors should take with respect to any strategic alternative. The Zynga board of directors retained the power and authority to approve the final decision on pursuing a strategic alternative, including a sale of Zynga. It was also understood that the Zynga board of directors would continue to have an active role in the consideration of strategic alternatives. The Zynga board of directors appointed Janice Roberts, Zynga’s Lead Independent Director, and Ellen Siminoff, the Chair of Zynga’s Nominating/Corporate Governance Committee, both of whom are independent members of the Zynga board of directors, as the members of the Strategic Committee. Noting the preliminary discussions between Goldman Sachs and Zynga management, the Zynga board of directors instructed the Strategic Committee to review the retention of a financial advisor to assist Zynga.

At various points from October 4, 2021, to October 6, 2021, the Strategic Committee met, with members of Zynga management and representatives of Wilson Sonsini each generally in attendance. During these meetings, the Strategic Committee (1) interviewed Goldman Sachs to serve as financial advisor to Zynga; and (2) discussed Goldman Sachs’ role and responsibilities as financial advisor to Zynga. At points, the representatives of Wilson Sonsini reviewed with the members of the Strategic Committee their fiduciary duties.

On October 6, 2021, the Zynga board of directors met, with members of Zynga management and representatives of Wilson Sonsini in attendance. Members of Zynga management reviewed with the Zynga board of directors a draft of Zynga’s long-range plan prepared by Zynga management, and described, among other things, the process for preparing Zynga’s long-range plan, including the underlying assumptions and various execution and other risks to realizing Zynga’s long-range plan. Additional information about the preparation and substance of

 

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Zynga’s long-range plan is contained in the section of this joint proxy statement/prospectus titled “Zynga Unaudited Prospective Financial Information.” The Zynga board of directors approved providing Zynga’s long-range plan to Party A and to Zynga’s financial advisor. The Strategic Committee provided its recommendation that the Zynga board of directors retain Goldman Sachs as Zynga’s financial advisor and reviewed the proposed terms of an engagement letter with Goldman Sachs. After considering Goldman Sachs’ qualifications, extensive expertise, international reputation, knowledge of the industry in which Zynga operates and experience in similar situations, the Zynga board of directors determined to retain Goldman Sachs as Zynga’s financial advisor. The Zynga board of directors delegated to the Strategic Committee the authority to negotiate an appropriate engagement letter with Goldman Sachs. Thereafter, the Strategic Committee continued to negotiate the terms of Goldman Sachs’ engagement letter.

On October 7, 2021, Zynga entered into a confidentiality agreement with Party A. This agreement did not include a “standstill” or other restriction on Party A’s ability to make public or private proposals to acquire Zynga.

On October 7, 2021, members of Zynga management gave a management presentation to Party A regarding Zynga and its business and prospects. Representatives of Goldman Sachs also attended this meeting. In connection with this meeting, Party A received a copy of Zynga’s long-range plan.

Also on October 7, 2021, the chief executive officer of a company (which is referred to as “Party C”) contacted Mr. Gibeau to express an interest in discussing potential strategic partnerships between Zynga and Party C. From time to time in the past, Zynga had considered the potential for transactions or strategic partnerships with Party C, but these considerations had never advanced beyond the formative stages.

On October 8, 2021, Mr. Zelnick called Mr. Gibeau to discuss Take-Two’s interest in a potential transaction with Zynga. Mr. Zelnick noted that any transaction between the two companies would likely have a significant stock component. This discussion was preliminary, and Mr. Zelnick did not make a specific acquisition proposal. Mr. Zelnick expressed a desire to meet with Mr. Gibeau again in the future regarding a combination of Zynga and Take-Two.

Also on October 8, 2021, the Strategic Committee met, with other members of the Zynga board of directors, members of Zynga management and representatives of Wilson Sonsini in attendance. Mr. Gibeau (1) reviewed the meeting with Party A, including that Party A was studying Zynga’s long-range plan and would respond in due course; (2) reminded the Strategic Committee of Party B’s desire for Mr. Gibeau to meet with Party B’s chief executive officer; and (3) updated the Strategic Committee on the conversations with Party C and Take-Two (including the proposed meeting with Mr. Zelnick in several weeks). The Strategic Committee determined that it was appropriate to wait for additional feedback from Party A.

On October 15, 2021, the Strategic Committee met, with members of Zynga management and representatives of Goldman Sachs in attendance. The Strategic Committee discussed Zynga’s long-range plan.

On October 22, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of Zynga. The Strategic Committee discussed the lack of a formal response by Party A to the management presentation held earlier that month. It was the consensus of the Strategic Committee that, in the light of the lack of urgency displayed by Party A, further efforts in pursuit of an acquisition of Zynga by Party A were not warranted.

On October 27, 2021, Messrs. Gibeau and Zelnick confirmed that they would meet again in-person during the week of November 15, 2021.

On November 12, 2021, in preparation for a November 15th meeting between Messrs. Gibeau and Zelnick, the Take-Two board of directors met, with representatives of each of J.P. Morgan, LionTree and Willkie in attendance, to discuss the possibility of pursuing a potential business combination transaction with Zynga. At that meeting members of senior management of Take-Two reported to the Take-Two board of directors on the status of Zynga’s portfolio, the strategic rationale for pursuing the potential transaction and the anticipated benefits of a

 

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potential transaction to Take-Two stockholders as well as a financial analysis of the proposed transaction. After discussion, it was the consensus of the Take-Two board of directors that Mr. Zelnick should continue to pursue the preliminary discussions with Mr. Gibeau and Zynga to determine whether the parties could come to an agreement with respect to a potential transaction. From and after this date and until the effective time, Mr. Zelnick provided regular updates to, and had numerous discussions with, members of the Take-Two board of directors regarding the status of ongoing discussions with Zynga.

On November 15, 2021, Messrs. Gibeau and Zelnick met. Mr. Zelnick expressed Take-Two’s interest in acquiring Zynga in a cash and stock transaction generally, but Mr. Zelnick did not propose a specific acquisition price. Mr. Zelnick stressed that Take-Two would only proceed with an acquisition if it was supported by the Zynga board of directors. Mr. Gibeau informed Mr. Zelnick that he would discuss Take-Two’s interest with the Zynga board of directors.

Following the November 15, 2021 meeting with Mr. Zelnick, Mr. Gibeau spoke with representatives of Goldman Sachs concerning Take-Two’s acquisition interest and the status of Party A’s consideration of a possible acquisition of Zynga. Representatives of Goldman Sachs subsequently spoke with a senior executive of Party A concerning the status of Party A’s evaluation of any acquisition of Zynga. The senior executive of Party A informed Goldman Sachs that, although Party A understood the strategic merits of acquiring Zynga, Party A was not prepared to present Zynga with an acquisition proposal at that time.

On November 17, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the members of the Strategic Committee their fiduciary duties. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of a possible combination of Zynga with Take-Two. The Strategic Committee determined that a combination of Zynga with Take-Two was potentially attractive and merited consideration by the Zynga board of directors. The Strategic Committee also discussed the recent conversation between representatives of Goldman Sachs and a senior executive of Party A, and the status of discussions with Party B. The representatives of Goldman Sachs reviewed with the Strategic Committee other potential strategic transaction partners for Zynga. Each potential partner was reviewed individually, with a focus on each potential partner’s (1) likely or previously expressed interest in a potential strategic transaction with Zynga; (2) track record of transactions; (3) ability to finance and consummate a transaction; and (4) larger strategic rationale for a transaction with Zynga.

On November 18, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of a possible combination of Zynga with Take-Two. The Zynga board of directors determined that it was interested in further exploring such a transaction. As such, the Zynga board of directors determined to invite Take-Two to make a specific combination proposal. The Zynga board of directors discussed other companies (including Party A, Party B and Party C) that Zynga could contact regarding their interest in a strategic transaction with Zynga. The Zynga board of directors noted the risk that a broad transaction solicitation process could result in public speculation that Zynga was pursuing a sale, and that such speculation could be harmful to Zynga and its employees and business partners. With respect to Party A, it was the consensus of the Zynga board of directors that a competitive dynamic—in the form of specific acquisition interest expressed by a third party—could be helpful in causing Party A to accelerate its consideration of an acquisition of Zynga. With respect to Party B, it was the consensus of the Zynga board of directors that Party B might not be able to consider an acquisition of Zynga with urgency. After the meeting, Mr. Gibeau advised Mr. Zelnick that the Zynga board of directors had invited Take-Two to submit a combination proposal.

In early December 2021, Party B proposed a meeting between Party B’s chief executive officer and Mr. Gibeau in late January 2022.

 

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On December 3, 2021, Zynga entered into a confidentiality agreement with Take-Two. This agreement did not include a “standstill” or other restriction on Take-Two’s ability to make public or private proposals to acquire Zynga.

Also on December 3, 2021, the Take-Two board of directors held a meeting with members of Take-Two senior management and representatives of each of J.P. Morgan, LionTree and Willkie in attendance. Mr. Zelnick updated the board members on recent discussions with Mr. Gibeau and the Take-Two board of directors approved the terms of a non-binding conditional offer to acquire Zynga for a mix of consideration consisting of shares of Take-Two common stock and cash having an assumed value of $9.85 per share of Zynga common stock, derived as described below.

On December 6, 2021, Messrs. Gibeau and Kim, as well as representatives of Goldman Sachs, met with Mr. Zelnick, members of Take-Two management and representatives of each of J.P. Morgan and LionTree. Mr. Zelnick proposed that Take-Two combine with Zynga, with each share of Zynga common stock being exchanged for consideration with an assumed value of $9.85 per share, 25% of which was to be in cash and 75% of which was to be in the form of shares of Take-Two common stock. The cash portion of the proposed consideration per share of Zynga common stock was $2.46 in cash, and the proposed exchange ratio was 0.0424 of a share of Take-Two common stock (at a fixed exchange ratio) per share of Zynga common stock, which assumed a value per share of Take-Two common stock equal to the then-current 20-day volume weighted average price of Take-Two common stock. We refer to this as the “initial Take-Two proposal.” In addition, Take-Two proposed that (1) Zynga and Take Two would agree to negotiate exclusively with each other; and (2) the transaction include a “go-shop” provision that would allow Zynga to affirmatively solicit acquisition interest from other companies for a period of time following entry into the merger agreement. Mr. Zelnick also requested the opportunity to discuss the proposal with the Zynga board of directors. Mr. Gibeau informed Mr. Zelnick that he would discuss the initial Take-Two proposal with the Zynga board of directors.

Later on December 6, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of the initial Take-Two proposal. The Strategic Committee determined that the initial Take-Two proposal merited consideration by the Zynga board of directors, and that Mr. Zelnick should be offered the opportunity to discuss the initial Take-Two proposal with the Zynga board of directors.

On December 9, 2021, the Strategic Committee met, with other members of the Zynga board of directors, members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The Strategic Committee discussed Mr. Zelnick’s upcoming meeting with the Zynga board of directors and Zynga’s goals for the meeting. Mr. Gibeau also informed the Strategic Committee of Mr. Zelnick’s desire to meet socially for dinner later that evening. Mr. Gibeau and the Strategic Committee discussed the merits of such a meeting, and it was agreed that Mr. Gibeau should meet with Mr. Zelnick. Messrs. Gibeau and Zelnick subsequently met for dinner.

Also on December 9, 2021, Goldman Sachs and the Strategic Committee concluded negotiation of the terms of Goldman Sachs’ engagement by Zynga. Zynga subsequently entered into an engagement letter with Goldman Sachs, as approved by the Strategic Committee.

On December 10, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. Mr. Zelnick and other members of Take-Two management and representatives of J.P. Morgan and LionTree were present for a portion of the meeting, during which they discussed the initial Take-Two proposal and the prospects of the combined company. Following the departure of Mr. Zelnick and the other members of Take-Two management and representatives of J.P. Morgan and LionTree from the meeting, the representatives of Wilson Sonsini reviewed with members of the Zynga board of directors their fiduciary duties. The Zynga board of directors discussed the initial Take-Two proposal and the strategic positioning of the combined company.

 

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On December 11, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. Members of Zynga management reviewed with the Zynga board of directors (1) the financial outlook for Zynga for the fiscal year ended December 31, 2021; and (2) an updated version of Zynga’s long-range plan that reflected Zynga management’s latest thinking based on the performance of Zynga’s business. The Zynga board of directors approved Zynga’s updated long-range plan and instructed management to provide the updated long-range plan to Goldman Sachs. The representatives of Goldman Sachs reviewed the initial Take-Two proposal and discussed various alternatives available to Zynga and strategic considerations, including other companies (such as Party A, Party B and Party C) that might have an interest in a strategic transaction with Zynga.

Later on December 11, 2021, the Strategic Committee met, with members of Zynga management and representatives of Wilson Sonsini in attendance. The Strategic Committee discussed the initial Take-Two proposal, as well as other strategic alternatives available to Zynga.

On December 13, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of the combined company and discussed various perspectives on Zynga’s long-range plan. It was the consensus of the Zynga board of directors that the initial Take-Two proposal was potentially attractive and merited additional consideration. The Zynga board of directors determined that it wished to further understand the prospects for the combined company and the strategic rationale for the transaction.

Later on December 13, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The Strategic Committee determined that members of the Zynga board of directors should meet again with Mr. Zelnick to further understand his views on the strategic rationale for a combination of Zynga with Take-Two. The Strategic Committee also discussed the appropriate time to again contact Party A concerning Party A’s interest in an acquisition of Zynga.

On December 15, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. Members of Zynga management reviewed (1) preliminary views on potential synergies resulting from a combination of Zynga with Take-Two, including the potential for significant revenue synergies; and (2) potential strategic alternatives available to Zynga, including transformative acquisitions and acquisitions that would expand Zynga into new lines of business. As part of this discussion, Zynga management described (1) potential challenges to and considerations in an acquisition of Zynga by Party B; and (2) a possible transaction with Party C and the complexities and other considerations inherent in such a transaction. The Zynga board of directors instructed Goldman Sachs to inform Party A that Zynga had received a credible acquisition proposal that the Zynga board of directors was seriously evaluating. The Zynga board of directors made this decision in the light of (1) Party A’s previously expressed interest in an acquisition of Zynga; and (2) a belief that a competitive dynamic might prompt Party A to accelerate its timing related to considering an acquisition of Zynga.

On December 16, 2021, as instructed by the Zynga board of directors, representatives of Goldman Sachs spoke with a senior executive of Party A about Zynga and informed Party A that Zynga had received a credible acquisition proposal that the Zynga board of directors was seriously evaluating.

Later on December 16, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The Strategic Committee discussed the conversation between representatives of Goldman Sachs and senior executives of Party A.

On December 17, 2021, Mr. Zelnick met with Mr. Gibeau, Ms. Siminoff and Mark Pincus, Zynga’s chairman. Those present discussed the strategic rationale for a combination of Zynga with Take-Two, including how to

 

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position the combined company to investors. During this discussion, Mr. Zelnick expressed Take-Two’s willingness to expand the Take-Two board of directors to accommodate two of the current members of the Zynga board of directors.

Later on December 17, 2021, Mr. Zelnick spoke with William “Bing” Gordon, a member of the Zynga board of directors, about the strategic rationale for a combination of Zynga with Take-Two, including how to position the combined company to investors.

Also on December 17, 2021, Goldman Sachs provided the Zynga board of directors with customary relationship disclosures regarding Goldman Sachs’ relationships with Take-Two, Party A and Party B; the Zynga board of directors did not identify any concerns with these disclosures. In addition, Goldman Sachs provided to Zynga management, for the information of the Zynga board of directors, materials that summarized, based on theoretical models, the potential effects of the announcement and of the consummation of an acquisition of Zynga on the capped call transactions that Zynga entered into with Goldman Sachs and other counterparties, each acting as principal for its own account, with respect to Zynga’s 0.25% convertible senior notes due 2024 in June 2019 and 0% convertible senior notes due 2026 in December 2020.

On December 18, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The discussions with Mr. Zelnick on December 17, 2021, were reviewed by the Strategic Committee. In particular, the Strategic Committee discussed the strategic rationale for a combination of Zynga with Take-Two. The Strategic Committee again discussed contacting Party B concerning its interest in an acquisition of Zynga. Given (1) the potential negative competitive impact to Zynga that could arise from sharing any of Zynga’s confidential information with Party B, (2) the lack of urgency displayed by Party B, (3) possible disruptive cultural and social implications of a potential combination of Zynga and Party B and (4) Zynga’s ability to solicit an alternative transaction during the “go-shop” period proposed by Take-Two, it was the consensus of the Strategic Committee not to contact Party B at that time. The lack of substantive response from Party A to the message delivered by Goldman Sachs was discussed. The representatives of Goldman Sachs reviewed a variety of ways to improve the initial Take-Two proposal for the benefit of Zynga’s stockholders, including by increasing the cash consideration per share or implementing a “collar” on the value of the stock consideration that Zynga’s stockholders receive (with the objective of increasing the certainty and stability of value delivered to Zynga’s stockholders at closing).

On December 19, 2021, the Strategic Committee met, with other members of the Zynga board of directors, members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The Strategic Committee again discussed contacting Party B concerning its interest in an acquisition of Zynga, and again determined not to contact Party B at that time (for the same reasons previously identified). The representatives of Goldman Sachs again reviewed a variety of ways to improve the initial Take-Two proposal for the benefit of Zynga’s stockholders, including by increasing the cash consideration per share or implementing a “collar” on the value of the stock consideration that Zynga’s stockholders receive. The Strategic Committee determined to recommend to the Zynga board of directors a counterproposal for the combination of Zynga with Take-Two, with each share of Zynga common stock being exchanged for $3.50 in cash and 0.0390 of a share of Take-Two common stock (with a fixed exchange ratio). This counterproposal implied a value of $10.45 per share of Zynga common stock based on the then-current share price of Take-Two common stock. We refer to this counterproposal as the “first Zynga counterproposal.”

On December 20, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The discussions with Take-Two and Party A were reviewed, including Party A’s lack of response following the December 16, 2021, discussion with representatives of Goldman Sachs. The Strategic Committee’s decision not to contact Party B was also reviewed. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of the first Zynga counterproposal and the ways in which that proposal improved the initial Take-Two proposal for the benefit of Zynga’s stockholders. The Zynga board of directors approved the first Zynga counterproposal and

 

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directed Goldman Sachs to share it with Take-Two. Goldman Sachs subsequently delivered the first Zynga counterproposal to representatives of Take-Two.

On December 21, 2021, the Strategic Committee met, with members of Zynga management and representatives of Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the members of the Strategic Committee their fiduciary duties.

Also on December 21, 2021, after reviewing the first Zynga counterproposal, and following discussions and analysis with its financial advisors and with the support of the Take-Two board of directors, Take-Two made a new proposal to combine with Zynga, with each share of Zynga common stock being exchanged for $3.06 in cash and 0.0398 of a share of Take-Two common stock (at a fixed exchange ratio). Take-Two’s proposal implied a value of $10.20 per share of Zynga common stock based on the then-current share price of Take-Two common stock. We refer to this proposal as the “revised Take-Two proposal.” The revised Take-Two proposal also contemplated a 45-day “go-shop” period.

Later on December 21, 2021, the Strategic Committee met, with other members of the Zynga board of directors, members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of the revised Take-Two proposal and ways to improve the proposal for the benefit of Zynga’s stockholders. The Strategic Committee instructed Goldman Sachs to prepare additional financial analyses of the revised Take-Two proposal.

Still later on December 21, 2021, the Strategic Committee met, with other members of the Zynga board of directors, members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ additional preliminary financial analyses of the revised Take-Two proposal. The Strategic Committee instructed Goldman Sachs to share with Take-Two a counterproposal for a combination with Zynga, with each share of Zynga common stock being exchanged for $3.50 in cash and 0.0376 of a share of Take-Two common stock (at a fixed exchange ratio). This counterproposal implied a value of $10.25 per share of Zynga common stock based on the then-current share price of Take-Two common stock. We refer to this counterproposal as the “second Zynga counterproposal.” Goldman Sachs subsequently delivered the second Zynga counterproposal to representatives of Take-Two.

Also on December 21, 2021, Take-Two management conveyed the second Zynga counterproposal to its board of directors, noting that the second Zynga counterproposal increased the implied value to $10.25 per share of Zynga common stock, and increased the cash component of the merger consideration from $3.06 per share of Zynga common stock to $3.50 per share of Zynga common stock. After reviewing the second Zynga counterproposal, including materials provided by Take-Two’s financial advisors, Take-Two’s board of directors authorized Take-Two to accept the counterproposal.

On December 22, 2021, Take-Two accepted the second Zynga counterproposal subject to each company agreeing to negotiate exclusively with the other for three weeks, with the ability for either company to extend the exclusivity period for an additional week.

On December 22, 2021, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. It was noted that Party A had still not responded following the message delivered by Goldman Sachs on December 16, 2021. The Strategic Committee determined to recommend that the Zynga board of directors agree to Take-Two’s exclusivity proposal.

Later on December 22, 2021, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of the second Zynga counterproposal. The Zynga board of directors determined to accept Take-Two’s exclusivity proposal and expressed its support for the second Zynga counterproposal.

 

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On December 23, 2021, Zynga and Take-Two amended their confidentiality agreement to (1) provide for the exclusivity period requested by Take-Two; and (2) include a “standstill” restricting either party’s ability to make public proposals to acquire the other.

Beginning on December 23, 2021, representatives of Take-Two and its advisors, including J.P. Morgan, LionTree and Willkie, outside legal counsel to Take-Two, were granted access to legal and operational due diligence documents and information regarding Zynga in an electronic data room to support their due diligence review of Zynga. Over the following days, members of Take-Two management and its advisors conducted operational, legal, financial, accounting, employment and other due diligence on Zynga, including reviewing Zynga’s commercial relationships, intellectual property, privacy, security, equity awards, employment arrangements and employee benefit plans, and compliance and regulatory matters. At various points, Take-Two management and its advisors met with Zynga management and its advisors regarding due diligence information, potential synergies, employee retention and related matters. Zynga also conducted reverse due diligence on Take-Two, including with respect to the Take-Two Long-Range Plan and the potential synergies that could result from the combination.

On December 25, 2021, representatives of Willkie sent a draft of the merger agreement to representatives of Wilson Sonsini. Over the following days, Zynga management and Take-Two management, and representatives of their respective legal advisors, negotiated the terms of the merger agreement. Key terms of the merger agreement negotiated between the parties included (1) whether, and the circumstances in which, each party’s board of directors could change its recommendation to its stockholders, or negotiate or accept an alternative acquisition transaction, including the circumstances in which the merger agreement could be terminated; (2) the amount of the termination fee payable by each party and the circumstances in which it would be payable; (3) the definition of “material adverse effect” with respect to each party; (4) the conditions to each party’s obligation to consummate the combination; (5) the parties’ obligations and commitments in connection with obtaining required regulatory approvals; and (6) the nature and scope of the interim operating covenants applicable to Zynga during the period prior to the closing of the combination.

On December 27, 2021, representatives of Willkie sent a draft of the Zynga voting agreement to representatives of Wilson Sonsini. It was proposed that Zynga’s directors and executive officers each agree to be parties to the Zynga voting agreement. Over the following days, Zynga management and Take-Two management, and representatives of their respective legal advisors, as well as representatives of the applicable Zynga stockholders requested to be party to the Zynga voting agreement, negotiated the terms of the Zynga voting agreement. Key terms of the Zynga voting agreement negotiated between the parties included (1) the circumstances in which the voting agreement would terminate; and (2) the restrictions on the ability of each stockholder party to the voting agreement to transfer such party’s shares of Zynga common stock. Zynga also requested that a Take-Two’s directors and executive officers be parties to a reciprocal voting agreement, and Take-Two agreed to this request.

On December 29, 2021, the Strategic Committee met, with members of Zynga management and representatives of Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the Strategic Committee the principal terms of the merger agreement, including the circumstances in which the Zynga board of directors could change its recommendation to Zynga’s stockholders and the circumstances under which each party could terminate the merger agreement. Members of Zynga management reviewed a further updated version of Zynga’s long-range plan that reflected Zynga management’s latest thinking based on the performance of Zynga’s business. The Strategic Committee authorized providing Zynga’s updated long-range plan to Goldman Sachs and Take-Two.

On December 31, 2021, Take-Two management held a meeting with Zynga management and representatives of Goldman Sachs in attendance. During this meeting, Take-Two management discussed the long-range plan for Take-Two prepared by Take-Two management, as well as Take-Two’s business and prospects. (Additional information about the preparation and substance of Take-Two’s long range plan is contained in, the section of this joint proxy statement/prospectus titled “Zynga Unaudited Prospective Financial Information”).

 

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On January 2, 2022, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of Take-Two. Members of Zynga management and representatives of Goldman Sachs discussed the management meeting held with Take-Two on December 31, 2021, and provided an update on Zynga’s reverse due diligence on Take-Two, including Zynga’s review of Take-Two’s long range plan, game title pipeline and potential synergies that could result from the combination. The Strategic Committee directed that Zynga management and Zynga’s financial and legal advisors continue their reverse due diligence on Take-Two and its business and prospects.

On January 5, 2022, the Strategic Committee met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. Members of Zynga management and the representatives of Goldman Sachs reviewed key reverse due diligence findings. The Strategic Committee discussed the attractiveness, stability and relative value of the stock portion of the consideration being offered by Take-Two.

Later on January 5, 2022, the Strategic Committee met, with members of Zynga management, other members of the Zynga board of directors and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The Strategic Committee continued to review and discuss key reverse due diligence findings with respect to Take-Two.

On January 6, 2022, the Strategic Committee met, with members of Zynga management, other members of the Zynga board of directors and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. After discussing key reverse due diligence findings with respect to Take-Two, the Strategic Committee determined that, in the light of increasingly volatile market conditions, it desired additional certainty and stability regarding the value to be delivered to Zynga’s stockholders at the closing of the combination. As such, the Strategic Committee instructed Goldman Sachs to propose a 10 percent symmetrical “collar” on the value of the stock consideration that Zynga’s stockholders receive in the combination.

On January 7, 2022, Take-Two management presented Zynga’s proposal for a 10 percent symmetrical “collar” to the Take-Two board of directors, together with information regarding the proposed collar prepared by Take-Two’s financial advisors. After reviewing the information regarding the proposal, and with the approval of Take-Two’s board of directors, Take-Two proposed a 7.5 percent symmetrical collar on the value of the stock consideration that Zynga’s stockholders receive in the combination.

Later on January 7, 2022, the Take-Two board of directors held a meeting with members of Take-Two management and representatives of each of J.P. Morgan, LionTree, and Willkie in attendance to take action on the proposed business combination. At the meeting members of senior management of Take-Two updated the Take-Two board of directors on the negotiation of the proposed merger with the management of Zynga, and reviewed the valuation of Zynga. Representatives of Willkie discussed the fiduciary duties applicable to the Take-Two board of directors and reviewed a summary of the proposed terms and conditions of the merger agreement, the voting agreements and the financing commitment papers. Representatives of each of J.P. Morgan and LionTree respectively reviewed for the Take-Two board of directors each of J.P. Morgan’s and LionTree’s respective preliminary financial analyses of the merger consideration provided for in the combination and answered questions from the directors with respect thereto.

Later on January 7, 2022, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The members of Zynga management and the representatives of Goldman Sachs reviewed key reverse due diligence findings. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of a combination of Zynga with Take-Two, including the impact of the “collar” on the stock consideration to be received by Zynga’s stockholders. The Zynga board of directors confirmed their agreement with Take-Two’s proposed 7.5 percent symmetrical collar on the value of the stock consideration. The representatives of Wilson Sonsini reviewed the

 

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principal terms of the merger agreement, the Zynga voting agreement and the Take-Two voting agreement, including the points in each document that remained under negotiation. As part of the discussion, it was noted that Take-Two desired to begin discussions with each of Messrs. Gibeau and Kim concerning their employment with the combined company following the closing of the combination. The Zynga board of directors determined to consider this matter further at a future meeting. The Zynga board of directors discussed which of its members should join the Take-Two board of directors in connection with the closing of the combination. Ms. Roberts and Ms. Siminoff left the meeting and the Zynga board of directors discussed compensation for Ms. Roberts and Ms. Siminoff for their service on the Strategic Committee.

Still later on January 7, 2022, the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Goldman Sachs reviewed Goldman Sachs’ preliminary financial analyses of a combination Zynga with Take-Two, including the impact of the “collar” on the stock consideration to be received by Zynga’s stockholders. The Zynga board of directors instructed Goldman Sachs to prepare additional financial analyses of a combination of Zynga with Take-Two. The representatives of Goldman Sachs and Ms. Roberts and Ms. Siminoff left the meeting. The Zynga board of directors approved the payment of $50,000 to each of Ms. Roberts and Ms. Siminoff for their service on the Strategic Committee, to be paid on or about April 15, 2022 (with such payment to be made regardless of the outcome of any strategic transaction involving Zynga). Ms. Roberts and Ms. Siminoff and the representatives of Goldman Sachs returned to the meeting. The representatives of Goldman Sachs reviewed Goldman Sachs’ additional preliminary financial analyses of a combination of Zynga with Take-Two. The Zynga board of directors approved Messrs. Gibeau and Kim commencing discussions with Take-Two regarding employment with Take-Two following the closing of the combination, following which, on January 9, 2022, Take-Two presented Messrs. Gibeau and Kim terms of employment to be documented prior to, and the effectiveness to be conditioned upon, (1) the closing of the combination and (2) the prior approval of the compensation committee of the Take-Two board of directors.

On January 9, 2022, the Take-Two board of directors held a meeting with members of Take-Two management and representatives of each of J.P. Morgan, LionTree and Willkie in attendance. Representatives of Willkie discussed the fiduciary duties applicable to the Take-Two board of directors and reviewed a summary of the proposed terms and conditions of the merger agreement, the voting agreements and the financing commitment papers. Representatives of each of J.P. Morgan and LionTree respectively reviewed for the Take-Two board of directors each of J.P. Morgan’s and LionTree’s financial analyses of the merger consideration provided for in the combination and answered questions from the directors with respect thereto. J.P. Morgan then rendered its oral opinion (subsequently confirmed by delivery of its written opinion) to the of Take-Two board of directors (in its capacity as such) that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the merger consideration to be paid by Take-Two in the proposed combination was fair, from a financial point of view, to Take-Two. J.P. Morgan’s written opinion is described below in the section entitled “—Opinions of Take-Two’s Financial Advisors—Opinion of J.P. Morgan Securities, LLC.” LionTree then also rendered its oral opinion to the Take-Two board of directors (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated January 9, 2022 addressed to the Take-Two board of directors) that, as of such date, the merger consideration to be paid by Take-Two pursuant to the merger agreement was fair, from a financial point of view, to Take-Two, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion LionTree’s written opinion is described below in the section entitled “—Opinions of Take-Two’s Financial Advisors—Opinion of LionTree Advisors LLC.” After additional discussions and deliberations including as to the matters discussed in the sections entitled “Take-Two’s Reasons for the Mergers and Recommendation of the Take-Two Board of Directors”, the Take-Two board of directors unanimously determined that the merger agreement, the combination and the other transactions contemplated by the merger agreement, including the Take-Two stock issuance and the adoption of the Take-Two charter amendment, were advisable and fair to and in the best interests of Take-Two and its stockholders and approved the merger agreement, the combination and

 

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the other transactions contemplated by the merger agreement. The Take-Two board of directors also resolved unanimously to recommend to Take-Two’s stockholders that they vote to approve the Take-Two stock issuance and approve the adoption of the Take-Two charter amendment.

On January 9, 2022 the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the members of the Zynga board of directors their fiduciary duties. The representatives of Wilson Sonsini also reviewed the principal terms of the merger agreement, the Zynga voting agreement, the Take-Two voting agreement and the other relevant transaction documents. Mr. Gibeau noted that negotiations with Take-Two were continuing with respect to his employment by the combined company following the closing of the combination. The Zynga board of directors noted the customary relationship disclosures provided by Goldman Sachs regarding its relationship with Take-Two (which disclosures had been updated as of January 7, 2022); the Zynga board of directors did not identify any concerns with these disclosures. The representatives of Goldman Sachs reviewed with the Zynga board of directors Goldman Sachs’ financial analyses of the consideration. The representatives of Goldman Sachs then rendered the oral opinion of Goldman Sachs, subsequently confirmed by delivery of its written opinion dated January 9, 2022, to the Zynga board of directors that, as of the date of the written opinion and based upon and subject to the factors and the assumptions set forth therein, the consideration to be paid to the holders (other than Take-Two and its affiliates) of shares of Zynga common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

Later on January 9, 2022, representatives of Wilson Sonsini and Willkie finalized the forms of the merger agreement, Zynga voting agreement, Take-Two voting agreement and related transaction documents.

Still later on January 9, 2022 the Zynga board of directors met, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed the final merger agreement with the Zynga board of directors. The representatives of Goldman Sachs confirmed the oral opinion of Goldman Sachs, subsequently confirmed by delivery of a written opinion dated January 9, 2022, to the Zynga board of directors that, as of the date of the written opinion and based upon and subject to the factors and the assumptions set forth therein, the consideration to be paid to holders (other than Take-Two and its affiliates) of shares of Zynga common stock pursuant to the merger agreement was fair from a financial point of view to such holders. The members of Zynga management reviewed the terms of the employment arrangements offered by Take-Two to each of Messrs. Gibeau and Kim with respect to their employment by the combined company following the closing of the combination. The Zynga board of directors, after considering the factors more fully described in the section of this joint proxy statement/prospectus titled “The Combination—Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors,” (1) determined that the merger agreement, the combination and the other transactions contemplated by the merger agreement were fair to, advisable and in the best interests of Zynga and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. The representatives of Goldman Sachs described solicitation activities that could be undertaken during the “go-shop” period. The Zynga board of directors directed the Strategic Committee to oversee Zynga management and Goldman Sachs as they engaged in these activities following the entry into, and public disclosure of, the merger agreement.

Still later on January 9, 2022, following the meeting of the Zynga board of directors, Zynga and Take-Two executed the merger agreement. The Zynga voting agreement and the Take-Two voting agreement were also executed.

On January 10, 2022, Zynga and Take-Two publicly announced the combination and the execution of the merger agreement and relevant transaction agreements.

Also on January 10, 2022, as directed by the Zynga board of directors, representatives of Goldman Sachs began contacting potential strategic transaction counterparties (including Party A, Party B and Party C) about their interest in participating in the “go-shop” process.

 

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Following entry into the merger agreement, the Strategic Committee met regularly, with members of Zynga management and representatives of each of Goldman Sachs and Wilson Sonsini in attendance. During these meetings, the representatives of Goldman Sachs described their contacts with third parties that might consider engaging in an alternative transaction to that contemplated by the merger agreement.

On February 25, 2022, Zynga announced the expiration of the “go-shop” period. During the “go-shop” period, Zynga and Goldman Sachs, at the direction of the Strategic Committee, actively solicited numerous parties

regarding a potential acquisition of Zynga. Zynga did not receive a Zynga alternative acquisition proposal during the “go-shop” period.

On March 10, 2022, the parties executed the First Amendment to the merger agreement to update the list of requisite non-U.S. antitrust approvals that are conditions to the obligation of Take-Two and Zynga to consummate the combination to consist of the approval of the applicable antitrust regulatory authority in Turkey, Germany, Austria and the United Kingdom (if the UK Competition and Markets Authority decides to open an investigation).

Take-Two’s Reasons for the Combination and Recommendation of the Take-Two Board of Directors

At a meeting of the Take-Two board of directors held on January 9, 2022, the Take-Two board of directors unanimously: (a) determined that the combination and the issuance of shares of Take-Two common stock in the combination as contemplated by the merger agreement, 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; (b) authorized and approved the execution, delivery and performance of the merger agreement by Take-Two and approved the combination and the issuance of shares of Take-Two common stock in the combination as contemplated by the merger agreement; and (c) recommended that Take-Two’s stockholders vote in favor of the Take-Two share issuance proposal and Take-Two charter amendment proposal. Accordingly, the Take-Two board of directors unanimously recommends that Take-Two’s stockholders vote “FOR” the approval of the Take-Two share issuance proposal, “FOR” the Take-Two charter amendment proposal and “FOR” the approval of the Take-Two adjournment proposal.

In evaluating the combination, the Take-Two board of directors consulted with members of Take-Two’s management team and with Take-Two’s outside legal counsel and financial advisors and, in reaching its determinations and recommendations, the Take-Two board of directors considered a number of factors.

Many of the factors considered favored the determinations and recommendations made by the Take-Two board of directors, including the following (not in any relative order of importance):

 

   

the expectation that the combined company will be well-positioned to capitalize on the interactive entertainment industry’s strong tailwinds, including a leadership position in mobile;

 

   

the expectation that the combination will establish Take-Two as a leader in mobile gaming, with mobile expected to comprise over 50% of its Net Bookings in Fiscal Year 2023 (as compared to an estimated 12% in Fiscal Year 2022);

 

   

the expectation that the combination will bolster Take-Two’s mobile offerings, which include popular games such as Dragon City, Monster Legends, Top Eleven, Two Dots, and WWE SuperCard, and consist of a diverse array of titles that focus on many of the most popular genres in mobile gaming, including casual, hypercasual, lifestyle, mid-core, puzzle, social casino and sports games;

 

   

the expectation that the combination will create a powerful and diverse portfolio of industry-leading titles that span key platforms and genres across interactive entertainment;

 

   

the expectation that by sharing best practices and key data insights across the enterprise, the combined company will benefit from significant development and publishing synergies, unlock new revenue streams and reach new audiences around the world;

 

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the expectation that the combined company will deliver a 14% compound annual growth rate for Net Bookings (excluding the annual Net Bookings opportunities and any future acquisitions) over the three fiscal year period ended March 31, 2024;

 

   

the expectation that the addition of Zynga’s mobile titles will expand Take-Two’s base of recurrent consumer spending;

 

   

the identification of at least $500 million of incremental annual Net Bookings opportunities to unlock over time, driven in part by creation of new mobile games and cross-platform experiences for many of the iconic franchises within Take-Two’s portfolio of intellectual property;

 

   

the ability to optimize recurrent consumer spending by combining resources and leveraging the collective knowledge across both companies;

 

   

the opportunity to cross-market through a larger, shared customer database and improve game economies through more effective data analytics and machine learning models;

 

   

the opportunity to use Zynga’s Chartboost advertising platform, which will improve new user acquisition through better audience targeting and optimize mobile advertising inventory to achieve greater yields;

 

   

the opportunity for geographic expansion into growth markets across Asia, including India, and the Middle East, among other regions;

 

   

the expectation of approximately $100 million of annual cost synergies within the first two years after closing, primarily driven by the rationalization of duplicative overhead including corporate general and administrative expenses and public company costs, as well as the benefit of scale efficiencies across the enterprise;

 

   

the expectation that the combination is structured to maintain a strong balance sheet, including significant annual cash generation;

 

   

the expectation that the combined company’s more diverse sources of consumer spending would help reduce volatility in revenue and operating results across reporting periods;

 

   

the expectation that the combined company’s strategic and financial flexibility will be greater than each company on a standalone basis, providing Take-Two with the financial resources to continue to invest in talent, development, and innovation, while also pursuing select inorganic growth opportunities.

 

   

the fact that, based on the number of shares of Take-Two common stock and the number of shares of Zynga common stock expected to be outstanding immediately prior to the completion of the combination, Take-Two’s stockholders are expected to own between 67.2% and 70.4% of the combined company immediately after the completion of the combination;

 

   

information and discussions with members of Take-Two’s management team and with Take-Two’s advisors regarding Zynga’s business, assets, financial condition, results of operations, reputation, current business strategy and prospects, including the projected long-term financial results of Zynga as a standalone company, the size and scale of the combined company and the expected pro forma effect of the combination on each company;

 

   

the belief that the Take-Two management team will be able to successfully integrate the two companies;

 

   

the fact that J.P. Morgan rendered its oral opinion (subsequently confirmed by delivery of its written opinion) to the Take-Two board of directors (in its capacity as such) on January 9, 2022 that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the merger consideration to be paid by Take-Two in the proposed merger was fair, from a

 

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financial point of view, to Take-Two. J.P. Morgan’s written opinion is described below in the section entitled “—Opinions of Take-Two’s Financial Advisors—Opinion of J.P. Morgan Securities, LLC”;

 

   

the fact that LionTree rendered its oral opinion to the Take-Two board of directors (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated January 9, 2022 addressed to the Take-Two board of directors) that, as of such date, the merger consideration to be paid by Take-Two pursuant to the merger agreement was fair, from a financial point of view, to Take-Two, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion. LionTree’s written opinion is described below in the section entitled “—Opinions of Take-Two’s Financial Advisors—Opinion of LionTree Advisors LLC;”

 

   

the review by the Take-Two board of directors with its advisors of the financial and other terms of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations to complete the combination and the termination provisions, as well as the likelihood of the completion of the combination and the evaluation by the Take-Two board of directors of the likely time period necessary to complete the combination. The Take-Two board of directors also considered the following specific aspects of the merger agreement:

 

   

the fact that the exchange ratio has a collar and will only be adjusted to compensate for a change in the price of Take-Two common stock prior to the completion of the combination within the collar, which provides certainty to Take-Two’s stockholders as to the range of their pro forma percentage ownership of the combined company immediately after the completion of the merger (as more fully described in the section titled “The Merger Agreement—Terms of the Combination; Merger Consideration”);

 

   

the limited number and nature of the conditions to the obligation of Zynga to complete the combination, as well as the probability that those conditions would be satisfied prior the end date (as more fully described in the section titled “The Merger Agreement—Conditions to Completion of the Combination”);

 

   

the conditions to the obligations of Take-Two, Merger Sub 1 and Merger Sub 2 to complete the combination, as well as the probability that those conditions would be satisfied prior to the end date (as more fully described in the section titled “The Merger Agreement—Conditions to Completion of the Combination”);

 

   

the extensive representations and warranties made by Zynga (as more fully described in the section titled “The Merger Agreement—Representations and Warranties”), as well as the covenants in the merger agreement relating to the conduct of Zynga’s business during the period from the date of the merger agreement through the effective time (as more fully described in the section titled “The Merger Agreement—Conduct of Business”);

 

   

the fact that the merger agreement includes restrictions, subject to certain exceptions, on the ability of Zynga to solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Zynga alternative acquisition proposal; and Take-Two’s right to match any Zynga superior proposal (as defined below in, and as more fully described in, the section titled “The Merger Agreement—Changes in Board Recommendations”);

 

   

the ability of Take-Two to terminate the merger agreement and receive an up to $550 million termination fee from Zynga under specified circumstances (as more fully described in the section titled “The Merger Agreement—Termination Fees and Expenses; Liability for Breach”);

 

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Take-Two’s right, under certain circumstances, prior to the approval of the Take-Two share issuance proposal or charter amendment proposal to furnish non-public information regarding Take-Two and its subsidiaries to, and to enter into discussions or negotiations with, any person or entity in response to a bona fide, written Take-Two alternative acquisition proposal (as more fully described in the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers—Certain Definitions”); and

 

   

the right of the Take-Two board of directors, prior to the approval of the Take-Two share issuance proposal, to make a Take-Two recommendation change in connection with a Take-Two superior proposal or a Take-Two intervening event as more fully described in the section titled “The Merger Agreement—Changes in Board Recommendations”.

In the course of its deliberations, the Take-Two board of directors also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

 

   

the risk that Zynga’s financial performance may not meet Take-Two’s expectations;

 

   

the possibility that the combination may not be completed or that completion may be unduly delayed for reasons beyond the control of Take-Two;

 

   

the possible disruption to Take-Two’s and Zynga’s respective operations that may result from the combination, including the potential for diversion of management and employee attention from other strategic opportunities or operational matters and for increased employee attrition during the period prior to completion of the combination, and the potential effect of the combination on Take-Two’s and Zynga’s respective businesses and relations with business partners, vendors and advertisers;

 

   

the adverse impact that business uncertainty pending completion of the combination could have on Take-Two’s and Zynga’s respective ability to attract, retain and motivate key personnel, and could have on Take-Two’s and Zynga’s respective ability to retain and grow its player base;

 

   

the difficulties and challenges inherent in completing the combination and integrating the businesses, operations and workforce of Zynga with those of Take-Two, and the possibility of encountering difficulties in achieving expected Net Bookings growth and cost synergies;

 

   

the risk that the anticipated strategic and other benefits to Zynga and Take-Two following completion of the combination, including the expected Net Bookings opportunities and synergies described above, will not be realized or will take longer to realize than expected;

 

   

the risk that certain Take-Two business partners that compete with Zynga, and that certain Zynga business partners that compete with Take-Two, may be more reluctant to work with or award future business to the combined company;

 

   

the risk that Take-Two stockholders may not approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal or that Zynga stockholders may not approve the Zynga merger proposal;

 

   

the risk that the structure of the combination could potentially trigger termination rights of Zynga’s counterparties under, or breach certain restrictive covenants or other terms of, Zynga’s contracts with third parties;

 

   

certain terms and conditions of the merger agreement, including:

 

   

the fact that the merger agreement includes restrictions on the ability of Take-Two to solicit, initiate, propose, induce the making or submission of, or knowingly encourage or facilitate in any way any offer, inquiry or proposal that constitutes, or could reasonably be expected to lead to, a Take-Two Alternative Acquisition Proposal, subject to certain exceptions (as more fully described in the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers—Take-Two No-Shop Period”);

 

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Zynga’s right, under specified circumstances (including during a “go shop” period), prior to the approval of the Zynga merger proposal, to furnish non-public information regarding Zynga and its subsidiaries to, and to enter into discussions or negotiations with, any person or entity in response to a bona fide, written Zynga alternative acquisition proposal (as more fully described in the section titled “The Merger Agreement—Go-Shop Period; Restrictions on Solicitations of Other Offers—Zynga No-Shop Period”);

 

   

the right of the Zynga board of directors, prior to the approval of the Zynga merger proposal, to make a Zynga recommendation change in connection with a Zynga superior proposal or a Zynga intervening event (as more fully described in the section titled “The Merger Agreement—Changes in Board Recommendations”);

 

   

the restrictions on the right of the Take-Two board of directors to make a Take-Two recommendation change, subject to certain conditions (as more fully described in the section titled “The Merger Agreement—Termination Fees and Expenses; Liability for Breach”), which could have the effect of discouraging Take-Two alternative acquisition proposals from being made or pursued; and

 

   

the requirement that Take-Two provide Zynga with an opportunity to propose revisions to the merger agreement prior to Take-Two being able to make a Take-Two recommendation change in connection with a Take-Two superior proposal or a Take-Two intervening event (as more fully described in the section titled “The Merger Agreement—Changes in Board Recommendations”);

 

   

the fact that Take-Two’s current stockholders will have reduced ownership and voting interests after the completion of the combination (compared to their current ownership and voting interests in Take-Two) and will exercise less influence over the Take-Two board of directors and management and policies of Take-Two (compared to their current influence over the Take-Two board of directors and management and policies of Take-Two);

 

   

the substantial costs to be incurred in connection with the combination, including those incurred regardless of whether the combination is completed;

 

   

the risks and contingencies relating to the announcement and pendency of the combination and the risks and costs to Take-Two if the combination is not completed on a timely basis or at all, including the impact on Take-Two’s relationships with employees, with business partners and with third parties;

 

   

the fact that if the combination is not completed, Take-Two will have expended significant human and financial resources on a failed transaction, and may also be required to pay a termination fee of $550 million under certain circumstances (as more fully described in the section titled “The Merger Agreement—Transaction Expenses and Termination Fees”); and

 

   

various other risks associated with the combination and the business of Take-Two described in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” respectively.

The factors set forth above are not intended to be exhaustive, but include many of the material factors considered by the Take-Two board of directors in approving the combination, the merger agreement, the issuance of shares of Take-Two common stock in the combination as contemplated by the merger agreement, and the Take-Two charter amendment, in authorizing the execution of the merger agreement and related transaction documents and in recommending that Take-Two’s stockholders vote in favor of the Take-Two share issuance proposal and Take-Two charter amendment proposal. In view of the wide variety of factors, both positive and negative, considered in connection with making its determinations and recommendations, and the complexity of these matters, the Take-Two board of directors did not find it practical to, and did not attempt to, quantify, rank or otherwise assign any relative or specific weights or values to any of the various factors considered in reaching its

 

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determination to approve the Combination, the merger agreement, the issuance of shares of Take-Two common stock in the combination as contemplated by the merger agreement, the Take-Two charter amendment, and to recommend that Take-Two’s stockholders vote in favor of the Take-Two share issuance proposal and the Take-Two charter amendment proposal. The Take-Two board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Take-Two board of directors. In addition, individual members of the Take-Two board of directors may have given different weights to different factors. The Take-Two board of directors carefully considered all of the factors described above as a whole.

Zynga’s Reasons for the Combination and Recommendation of the Zynga Board of Directors

The Zynga board of directors unanimously: (1) determined that the merger agreement, the combination and the other transactions contemplated by the merger agreement were fair to, advisable and in the best interests of Zynga and its stockholders; (2) adopted and approved the merger agreement, the combination and the other transactions contemplated by the merger agreement; and (3) recommended that Zynga stockholders adopt the merger agreement. Accordingly, the Zynga board of directors unanimously recommends that Zynga stockholders vote “FOR” the Zynga merger proposal, “FOR” the Zynga compensation proposal, and “FOR” the Zynga adjournment proposal.

As described in the section titled “—Background of the Combination,” in evaluating the merger agreement and the transactions contemplated thereby, including the combination, the Zynga board of directors held a number of meetings and consulted Zynga management and Zynga’s outside legal and financial advisors. In reaching its decision to approve the merger agreement and to recommend that Zynga stockholders vote to adopt the merger agreement, the Zynga board of directors considered a number of factors, including, but not limited to the following (which are not necessarily presented in order of their relative importance to the Zynga board of directors), and concluded that entering into the merger agreement with Take-Two was advisable and in the best interests of Zynga and its stockholders.

 

   

Strategic Rationale of the Combination. The strategic and business rationale of the combination and related opportunities for value creation for stockholders, employees, players and partners. Among the potential benefits identified by the Zynga board of directors were:

 

   

the opportunity to combine two successful, complementary businesses with leadership positions in console, PC and mobile gaming and create a diverse portfolio of titles and services that span key platforms and genres across interactive entertainment;

 

   

the opportunity to combine each company’s intellectual property and capabilities in game development, publishing and commercialization to expand the combined company’s offerings and player base and enhance player experience, choice and retention;

 

   

the expectation that the combined company’s more diverse sources of consumer spending would help reduce volatility in revenue and operating results across reporting periods;

 

   

the importance of scale in the highly competitive and consolidating interactive entertainment industry, and the potential for the combination to strengthen the combined company’s competitive positioning and financial flexibility to continue investment in talent, development, and innovation while also pursuing inorganic growth opportunities;

 

   

the potential for consumer acquisition synergies and cross-marketing opportunities to user communities generated from the combined company’s diversified and expanded player base, portfolio of titles, platform capabilities and geographical reach;

 

   

the Zynga board of directors’ view, based on discussions with Zynga management, of the ability of Take-Two management to successfully integrate and combine the respective businesses of Zynga and Take-Two;

 

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discussions with Zynga’s management and Zynga’s advisors regarding the business, operations, strategy and future prospects of Take-Two and the combined company, including the results of Zynga’s reverse due diligence review of Take-Two;

 

   

the expectation that the combined company could achieve at least $500 million of incremental annual Net Bookings opportunities over time and approximately $100 million of annual cost synergies within the first two years after closing, and that Zynga stockholders will be able to participate in the benefits of such potential synergies as stockholders of the combined company; and

 

   

other strategic benefits and opportunities for innovation that could be achieved through the sharing of Zynga’s and Take-Two’s technology, employee talent and data analytics.

 

   

Financial Condition, Results of Operations and Prospects of Zynga; Risks of Execution. The current, historical and projected financial condition, results of operations and business of Zynga, as well as Zynga’s prospects and risks if it were to remain an independent company. In particular, the Zynga board of directors considered the Zynga long-range plan (as summarized in the section titled—“Zynga Unaudited Prospective Financial Information”). As part of this, the Zynga board of directors considered the potential opportunities that the Zynga long-range plan presented against, among other things, various execution and other risks to achieving the Zynga long-range plan and related uncertainties, including Zynga’s ability to continue to launch, innovate, enhance and successfully monetize games and grow its player base and the impact of industry, player, competitive and regulatory trends on Zynga and its business. The Zynga board of directors noted that Zynga’s bookings, revenue, player metrics and operating results have fluctuated in the past and could vary significantly from quarter-to-quarter and year-to-year in the future because of a variety of factors, including those described in the “risk factors” set forth in Zynga’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and subsequent reports filed with the SEC.

 

   

Value to Zynga Stockholders. The belief of the Zynga board of directors that the merger consideration represents the best value reasonably obtainable for the shares of Zynga common stock, taking into account business, competitive, industry and market risks and the Zynga board of directors’ familiarity with the business, operations, prospects, business strategy, financial condition and results of Zynga on a historical and prospective basis. In addition, the Zynga board of directors believed that, considering the execution and other risks to achieving the Zynga Long-Range Plan and the strategic rationale of the combination, the merger consideration reflects a fair and favorable price for the shares of Zynga common stock. In this regard, the Zynga board of directors considered, among other things:

 

   

various analyses as to the valuation of Zynga as an independent company;

 

   

the implied value of the consideration to be received by Zynga stockholders in the combination (using the closing price of Take-Two common stock on January 7, 2022, the last trading day before the announcement of the combination, of $164.60 as the Take-Two common stock price for purposes of calculating the exchange ratio) represented:

 

   

a premium of approximately 64% to closing price of Zynga common stock on January 7, 2022; and

 

   

multiples of approximately 4.0x to Zynga’s estimated Bookings for Zynga’s fiscal year 2022 and approximately 18.2x to Zynga’s estimated Adjusted EBITDA for Zynga’s fiscal year 2022 (which estimated amounts were included in the Zynga standalone projections, as described further in the section of this joint proxy statement/prospectus titled “Zynga Unaudited Prospective Financial Information”).

 

   

the historic trading ranges of Zynga common stock and Take-Two common stock;

 

   

the merger consideration was the result of extensive negotiation between the parties overseen for Zynga by the Strategic Committee composed of independent members of the Zynga board

 

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of directors, and the Zynga board of directors belief that the merger consideration represented the best value that Zynga could reasonably obtain from Take-Two;

 

   

the fact that a substantial portion of the merger consideration consists of Take-Two common stock, which provides Zynga stockholders with participation in the upside potential of a larger, more diversified company. The Zynga board of directors also considered the significant cash portion of the merger consideration, which provides Zynga stockholders with certainty of value and liquidity upon completion of the combination for such portion of the merger consideration;

 

   

the fact that the stock portion of the merger consideration is based upon a floating exchange ratio and subject to a $156.50 to $181.88 collar range, which provides additional certainty and stability to the stock portion of the consideration to be delivered to Zynga stockholders;

 

   

the possibility that the value of the merger consideration payable to Zynga stockholders could increase if the price of Take-Two common stock increases above the high end of the collar of $181.88 prior to completion of the combination; and

 

   

the expected treatment of the combination as a tax-free reorganization under Section 368(a) of the Code for U.S. federal income tax purposes, as more fully described in the section titled “U.S. Federal Income Tax Consequences of the Combination.”

 

   

Permitted Solicitation of Alternative Acquisition Proposals. The merger agreement permitted Zynga and its representatives, at the direction of the Zynga board of directors, during the go-shop period, to (1) initiate, solicit, propose, induce or encourage any alternative acquisition proposals from third parties; (2) provide nonpublic information to third parties; and (3) participate in discussions and negotiations with third parties regarding alternative acquisition proposals.

 

   

Potential Strategic Alternatives. The assessment of the Zynga board of directors that none of the possible alternatives to the combination (including the possibility of continuing to operate Zynga as an independent company or pursuing a different transaction, and the desirability and perceived risks of those alternatives, as well as the potential benefits and risks to Zynga’s stockholders of those alternatives and the timing and likelihood of effecting such alternatives) was reasonably likely to present superior opportunities for Zynga to create greater value for Zynga stockholders, taking into account execution risks as well as business, industry, player, competitive and regulatory risks. In this regard, the Zynga board of directors considered the fact that Party A, the party that the Zynga board of directors thought most likely to be able to complete an acquisition of Zynga on an appropriate timeline, decided not to submit a proposal to acquire Zynga prior but would (together with other potentially interested acquirors) be able to fully evaluate and make an alternative acquisition proposal during the go-shop period.

 

   

Opinion of Goldman Sachs. The opinion, dated January 9, 2022, of Goldman Sachs to the Zynga board of directors as to the fairness, from a financial point of view and as of such date, of the merger consideration to be paid to the holders (other than Take-Two and its affiliates) of shares of Zynga common stock pursuant to the merger agreement), which opinion was based on and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken as set forth in such opinion attached as Annex D to this joint proxy statement/prospectus and more fully described in the section titled “—Opinion of Zynga’s Financial Advisor.”

 

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Terms of the Merger Agreement. The terms of the merger agreement, which was the product of arms’-length negotiations overseen for Zynga by the Strategic Committee composed of independent members of the Zynga board of directors, and the belief of the Zynga board of directors that the merger agreement contained terms and conditions that are, in the Zynga board of directors’ view, favorable to Zynga and its stockholders. The factors considered included:

 

   

Zynga’s ability, under certain circumstances, to furnish information to, and conduct negotiations with, third parties regarding acquisition proposals, including after the no-shop period start date;

 

   

the Zynga board of directors’ ability, under certain circumstances, to withdraw or modify its recommendation that Zynga stockholders vote in favor of the adoption of the merger agreement;

 

   

the Zynga board of directors’ ability, under certain circumstances, to terminate the merger agreement to enter into an alternative acquisition agreement. In that regard, the Zynga board of directors believed that the termination fee payable by Zynga in such instance was reasonable, consistent with similar fees payable in comparable transactions, and not preclusive of other offers;

 

   

Take-Two’s agreement to appoint to the Take-Two board of directors two of Zynga’s current directors, designated by Zynga and approved by Take-Two, in connection with the completion of the combination;

 

   

the limited conditions to Take-Two’s obligation to consummate the combination;

 

   

the consummation of the combination not being subject to a financing condition;

 

   

Zynga’s ability to specifically enforce Take-Two’s obligations under the merger agreement, including Take-Two’s obligations to complete the combination;

 

   

the likelihood that Take-Two would complete the combination taking into account (1) the committed debt financing Take-Two obtained in connection with the combination and Take-Two’s financial condition and ability to fund the cash portion of the merger consideration; and (2) the commitment by Take-Two to obtain applicable consents and approvals under antitrust laws and assume the risks related to certain conditions and requirements that may be imposed by regulators in connection with securing such consents and approvals up to specified thresholds and limitations;

 

   

the limited circumstances in which the Take-Two board of directors may change its recommendation that Take-Two stockholders approve the Take-Two share issuance proposal and the Take-Two charter amendment proposal; and

 

   

the requirement that Take-Two pay Zynga a $550 million termination fee in certain circumstances.

 

   

Appraisal Rights. The appraisal rights in connection with the combination available to Zynga stockholders who timely and properly exercise such appraisal rights under the DGCL if certain conditions are met.

The Zynga board of directors also considered uncertainties and risks and other potentially negative factors related to the combination, including the following:

 

   

Potential Decrease in the Value of the Merger Consideration. The value of the stock portion of the merger consideration payable to Zynga stockholders could decrease if the price of Take-Two common stock decreases below $156.50 (the low end of the collar) prior to completion of the combination;

 

   

Combination and Integration Risks. The risk that the combined company will not realize all of the anticipated strategic and other benefits of the merger, including the possibility that Take-Two’s

 

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financial performance may not meet Zynga’s expectations and that the expected synergies may not be realized or will cost more to achieve than anticipated. In this regard, the Zynga board of directors was aware of the challenges inherent in completing the combination and integrating the businesses, operations and workforces of Zynga and Take-Two, and that this process could take longer than expected and might ultimately be unsuccessful;

 

   

Effects of the Announcement of the Combination. The effects of the public announcement of the combination, including the: (1) effects on Zynga’s employees, business partners, players, operating results; (2) potential effects on the stock price of Take-Two and Zynga; (3) impact on Zynga’s ability to attract and retain key employees, including game development and launch talent; and (4) potential for litigation in connection with the combination;

 

   

Need to Obtain Required Stockholder Approvals. The possibility that Zynga stockholders may not approve the adoption of the merger agreement at the Zynga special meeting or that Take-Two stockholders may not approve the Take-Two share issuance proposal or the Take-Two charter amendment proposal at the Take-Two special meeting;

 

   

Need to Obtain Required Regulatory Clearances. Completion of the combination would require approval, or expiration or termination of the applicable waiting periods, under the HSR Act and other applicable non-U.S. antitrust laws. In this regard, the Zynga board of directors considered the risk that regulatory agencies may not approve the combination or may impose terms and conditions on their approvals that exceed the thresholds and limitations that Take-Two agreed to in the merger agreement, or that would otherwise adversely affect the business and financial results of the combined company, and the amount of time that might be required to obtain all required regulatory consents and approvals;

 

   

Take-Two’s Ability to Consider Alternative Transactions. The risk related to Take-Two’s right, subject to certain conditions, to respond to and negotiate with respect to certain acquisition proposals from third parties, and the related possibility that the Take-Two board of directors might withdraw its recommendation in favor of the Take-Two share issuance proposal or the Take-Two charter amendment proposal;

 

   

Restrictions on Zynga’s Ability to Solicit Alternative Transactions. The restrictions in the merger agreement on Zynga’s ability to solicit alternative acquisition proposals after the go-shop period (subject to certain exceptions to allow the Zynga board of directors to exercise its fiduciary duties and to accept a superior proposal, and then only upon the payment of a termination fee);

 

   

Termination Fee Payable by Zynga. The requirement that Zynga pay Take-Two a termination fee under certain circumstances following termination of the merger agreement, including if the Zynga board of directors terminates the merger agreement to accept a superior proposal. The Zynga board of directors considered the potentially discouraging impact that this termination fee could have on a third party’s interest in making a competing proposal to acquire Zynga;

 

   

Expense Reimbursement by Zynga. The requirement that Zynga reimburse $50 million of Take-Two’s expenses if the merger agreement is terminated by either party in certain circumstances following the failure of Zynga stockholders to approve the adoption of the merger agreement at the Zynga special meeting;

 

   

Risk Associated with Failure to Consummate the Combination. The possibility that the combination might not be consummated, and if it is not consummated, that: (1) Zynga’s directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work on behalf of Zynga during the pendency of the combination; (2) Zynga will have incurred significant transaction and other costs; (3) Zynga’s continuing business relationships with employees, business partners and players may be adversely affected; (4) the trading price of Zynga common stock could be adversely affected; (5) the termination fee payable by Take-Two to Zynga will not be available in all instances in which the merger agreement is terminated and such termination fee may not be sufficient to compensate Zynga for the damage

 

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suffered by its business as a result of the pendency of the combination or of the strategic initiatives forgone by Zynga during this period; (6) the contractual and legal remedies available to Zynga in the event of the termination of the merger agreement may be insufficient, costly to pursue or both; and (7) investors, employees, business partners and players may develop an adverse perception about Zynga’s prospects as a result of the failure of the combination to be consummated;

 

   

Impact of Interim Restrictions on Zynga’s Business Pending the Completion of the Combination. The restrictions on the conduct of Zynga’s business prior to the consummation of the combination, which could delay or prevent Zynga from undertaking business opportunities that may arise, or taking other actions with respect to its operations that the Zynga board of directors and management might believe were appropriate or desirable; and

 

   

Interests of Zynga’s Directors and Executive Officers. The interests that Zynga’s directors and executive officers may have in the combination, which may be different from, or in addition to, those of Zynga’s other stockholders.

This discussion is not meant to be exhaustive. Rather, it summarizes the material reasons and factors evaluated by the Zynga board of directors in its consideration of the merger agreement and the transactions contemplated thereby. After considering these and other factors, the Zynga board of directors concluded that the potential benefits of entering into the merger agreement outweighed the uncertainties and risks. In the light of the variety of factors considered by the Zynga board of directors and the complexity of these factors, the Zynga board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights, ranks or values to the factors that it considered in reaching its determination and recommendations. Moreover, each member of the Zynga board of directors applied his or her own personal business judgment to the process and may have assigned different relative weights, ranks or values to the different factors. The Zynga board of directors approved the merger agreement and the transactions contemplated thereby, and recommended that Zynga stockholders adopt the merger agreement, based upon the totality of the information presented to, and considered by, the Zynga board of directors.

The foregoing discussion of the information and factors considered by the Zynga in approving the merger agreement is forward looking in nature. This information should be read in the light of the factors discussed in the section titled “Cautionary Statement Regarding Forward-Looking Information.”

Opinions of Take-Two’s Financial Advisors

Opinion of J.P. Morgan Securities, LLC

Pursuant to an engagement letter, Take-Two retained J.P. Morgan as its financial advisor in connection with the proposed combination.

At the meeting of the Take-Two board of directors on January 9, 2022, J.P. Morgan rendered its oral opinion to the Take-Two board of directors, subsequently confirmed by delivery of J.P. Morgan’s written opinion to the Take-Two board of directors, dated January 9, 2022, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing its opinion, the merger consideration to be paid by Take-Two in the proposed merger was fair, from a financial point of view, to Take-Two.

The full text of the written opinion of J.P. Morgan dated January 9, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Take-Two’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was provided to the Take-Two board of directors (in its capacity as such) in connection with and for the

 

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purposes of its evaluation of the proposed combination, was directed only to the merger consideration to be paid in the combination and did not address any other aspect of the combination. J.P. Morgan expressed no opinion as to the fairness of the merger consideration to the holders of any class of securities, creditors or other constituencies of Take-Two or as to the underlying decision by Take-Two to engage in the proposed combination. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. J.P. Morgan’s opinion does not constitute a recommendation to any stockholder of Take-Two as to how such stockholder should vote with respect to the proposed combination or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

 

   

reviewed a draft execution version dated January 9, 2022 of the merger agreement;

 

   

reviewed certain publicly available business and financial information concerning Zynga and Take-Two and the industries in which they operate;

 

   

compared the proposed financial terms of the combination with the publicly available financial terms of certain mergers involving companies J.P. Morgan deemed relevant and the consideration received for such companies;

 

   

compared the financial and operating performance of Zynga and Take-Two with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Zynga common stock and Take-Two common stock and certain publicly traded securities of such other companies;

 

   

reviewed certain internal financial analyses and forecasts prepared by the managements of Zynga and Take-Two relating to their respective businesses, including the Take-Two standalone projections and Zynga standalone projections as of December 2021 (each as defined and summarized in the sections “—Zynga Unaudited Prospective Financial Information” and “—Take-Two Unaudited Prospective Financial Information”), as well as the synergy projections (as defined and summarized in the section titled “—Take-Two Unaudited Prospective Financial Information”) prepared by the management of Take-Two; and

 

   

performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of the management of Zynga and Take-Two with respect to certain aspects of the merger, and the past and current business operations of Zynga and Take-Two, the financial condition and future prospects and operations of Zynga and Take-Two, the effects of the combination on the financial condition and future prospects of Take-Two, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with LionTree by Zynga and Take-Two or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to its engagement letter with Take-Two, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Zynga or Take-Two under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the synergy projections, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management of Take-Two as to the expected future results of operations and financial condition of Take-Two and Zynga to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the synergy projections) or the assumptions on which they were based. J.P. Morgan made certain assumptions, at the direction of management of Take-Two, with respect to the treatment of and/or adjustments under, as applicable, the terms of the convertible senior notes

 

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indentures and the capped call documentation (both as defined in the merger agreement), in connection with the merger. J.P. Morgan also assumed that the combination and the other transactions contemplated by the merger agreement will qualify as a tax-free reorganization for United States federal income tax purposes, and will be consummated as described in the merger agreement, and that the definitive merger agreement would not differ in any material respects from the draft execution version thereof furnished to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by Take-Two and Zynga in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and has relied on the assessments made by advisors to Take-Two with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the combination will be obtained without any adverse effect on Zynga or Take-Two or on the contemplated benefits of the combination.

The Zynga standalone projections as of December 2021 and the Take-Two projections furnished to J.P. Morgan were prepared by the managements of Zynga and Take-Two, respectively, as defined and discussed more fully under “—Take-Two Unaudited Prospective Financial Information” and “—Zynga Unaudited Prospective Financial Information”, beginning on page 106 of this joint proxy statement/prospectus. Take-Two and Zynga do not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed combination, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of the management of Zynga and Take-Two, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections and other forward-looking statements, please refer to the section entitled “Cautionary Statements Regarding Forward Looking Statements” beginning on page 22 of this joint proxy statement/prospectus.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect such opinion and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the merger consideration to be paid by Take-Two in the proposed merger and J.P. Morgan expressed no opinion as to the fairness of the merger consideration to the holders of any class of securities, creditors or other constituencies of Take-Two or as to the underlying decision by Take-Two to engage in the combination. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the combination, or any class of such persons relative to the merger consideration to be paid by Take-Two in the combination or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which the Take-Two common stock or the Zynga common stock will trade at any future time.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise Take-Two with respect to the proposed combination on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with Take-Two and the industries in which it operates.

For services rendered in connection with the combination, Take-Two has agreed to pay J.P. Morgan $34.0 million, of which $3.0 million was payable in connection with delivery of J.P. Morgan’s opinion and $31.0 million is contingent and payable upon the effective time. In addition, Take-Two has agreed to reimburse J.P. Morgan for certain expenses incurred in connection with its services and indemnify J.P. Morgan for certain liabilities arising out of its engagement. During the two years preceding the date of J.P. Morgan’s opinion letter,

 

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neither J.P. Morgan nor its affiliates have had any other material financial advisory or other material commercial or investment banking relationships with Take-Two. During the two years preceding the date of J.P. Morgan’s opinion letter, J.P. Morgan and its affiliates have had commercial or investment banking relationships with Zynga for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included acting as joint lead bookrunner on Zynga’s offering of debt securities in December 2020. An affiliate of J.P. Morgan has committed to arrange and/or provide financing to Take-Two in connection with the merger for customary compensation. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of Zynga and Take-Two. During the two year period preceding delivery of its opinion, the aggregate fees recognized by J.P. Morgan from Take-Two were approximately $0.8 million and from Zynga were approximately $4.5 million. In the ordinary course of its businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of Zynga or Take-Two for its own account or for the accounts of customers and, accordingly, J.P. Morgan may at any time hold long or short positions in such securities or other financial instruments.

Opinion of LionTree Advisors, LLC

The Take-Two board of directors retained LionTree to act as a financial advisor to the Take-Two board of directors in connection with the combination. On January 9, 2022 at a meeting of the Take-Two board of directors held to evaluate the combination, LionTree rendered its oral opinion to the Take-Two board of directors (which was subsequently confirmed in writing by delivery of LionTree’s written opinion dated January 9, 2022 addressed to the Take-Two board of directors) that, as of such date, the merger consideration to be paid by Take-Two pursuant to the merger agreement was fair, from a financial point of view, to Take-Two, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion.

LionTree’s opinion was provided to the Take-Two board of directors (in its capacity as such) and only addressed the fairness, from a financial point of view, of the merger consideration to be paid by Take-Two pursuant to the merger agreement. The summary of LionTree’s opinion in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this joint proxy statement/prospectus and incorporated herein by reference, and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken, and other matters considered by LionTree in preparing its opinion. However, neither LionTree’s opinion nor the summary of its opinion and the related analyses set forth in this joint proxy statement/prospectus constitute a recommendation to any holder of Take-Two common stock as to how such stockholder should vote or act on any matter relating to the merger or any other matter.

In arriving at its opinion, LionTree, among other things:

 

   

reviewed a draft execution version, dated January 9, 2022, of the merger agreement;

 

   

reviewed certain publicly available business and financial information relating to Zynga and Take-Two;

 

   

reviewed certain historical financial information and other data relating to Take-Two and Zynga that were provided to LionTree by the management of Take-Two and Zynga, respectively, approved for LionTree’s use by Take-Two, and not publicly available;

 

   

reviewed certain internal financial forecasts, estimates, and other data relating to the business and financial prospects of Take-Two that were provided to LionTree by the management of Take-Two, approved for LionTree’s use by Take-Two, and not publicly available, including the Take-Two standalone projections (as defined and summarized in the section “—Take-Two Unaudited Prospective Financial Information”);

 

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reviewed certain internal financial forecasts, estimates, and other data relating to the business and financial prospects of Zynga that were provided to LionTree by the management of Zynga, approved for LionTree’s use by Take-Two, and not publicly available, including the Zynga standalone projections as of December 2021 (as defined and summarized in the section “—Zynga Unaudited Prospective Financial Information”);

 

   

reviewed the synergy projections prepared by the management of Take-Two and approved for LionTree’s use by Take-Two;

 

   

conducted discussions with members of the senior management of Take-Two and Zynga concerning the business, operations, historical financial results, and financial prospects of Take-Two and Zynga, the synergy projections and the combination;

 

   

reviewed current and historical market prices of the Take-Two common stock and the Zynga common stock;

 

   

reviewed certain financial and stock market data of Take-Two and Zynga and compared that data with similar publicly available data for certain other companies;

 

   

reviewed certain pro forma effects relating to the merger, including the effects of anticipated financings, prepared by management of Take-Two and approved for LionTree’s use by Take-Two; and

 

   

conducted such other financial studies, analyses and investigations, and considered such other information, as LionTree deemed necessary or appropriate.

In connection with LionTree’s review, with the Take-Two board of directors’ consent, LionTree assumed and relied upon, without independent verification, the accuracy and completeness, of the information provided to, discussed with, or reviewed by LionTree for the purpose of its opinion. In addition, with the Take-Two board of directors’ consent, LionTree did not made any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Take-Two or Zynga, or any of their respective subsidiaries, nor was LionTree furnished with any such evaluation or appraisal. With respect to the Take-Two standalone projections, Zynga standalone projections as of December 2021, estimates, synergy projections and pro forma effects referred to above, LionTree assumed, with the Take-Two board of directors’ consent and based on advice of management of Take-Two and Zynga, that such forecasts have been reasonably prepared in good faith on a basis reflecting the best currently available estimates and judgments of the management of Take-Two and Zynga as to the future financial performance of their respective companies. LionTree expressed no opinion with respect to such forecasts or estimates (including any synergies or pro forma effects). LionTree also made certain assumptions, with the Take-Two board of directors’ consent, with respect to the treatment of and/or adjustments under the terms of the convertible senior notes indentures and the capped call documentation (both as defined in the merger agreement), in connection with the combination. LionTree also assumed, with the Take-Two board of directors’ consent, that the merger will have the tax consequences contemplated by the merger agreement. LionTree’s opinion did not address any legal, regulatory, taxation, or accounting matters, as to which LionTree understand that you have obtained such advice as you deemed necessary from qualified professionals, and LionTree assumed the accuracy and veracity of all assessments made by such advisors to Take-Two with respect to such matters. LionTree’s opinion was necessarily based on economic, monetary, market, and other conditions as in effect on, and the information available to LionTree as of, the date of the opinion and LionTree’s opinion speaks only as of the date thereof.

LionTree’s opinion did not address Take-Two’s underlying business decision to engage in the combination, or the relative merits of the combination as compared to other business strategies or mergers that might be available to Take-Two. LionTree also expressed no view as to, and its opinion did not address, the solvency of Take-Two, Zynga or any other entity under any state, federal, or other laws relating to bankruptcy, insolvency, or similar matters. LionTree’s opinion addressed only the fairness from a financial point of view, as of the date thereof, to Take-Two of the merger consideration to be paid by Take-Two pursuant to the merger agreement. LionTree had

 

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not been asked to, nor did LionTree, offer any opinion as to the terms, other than the merger consideration to the extent expressly specified herein, of the merger agreement or any related documents or the form of the combination or any related merger, including the fairness of the merger to, or any consideration received in connection therewith by, the holders of any class of securities, creditors, or other constituencies of Take-Two, Zynga, or any of their respective affiliates. LionTree were not asked to, nor did LionTree, offer any opinion with respect to any allocation of the merger consideration to be paid pursuant to the merger (or any portion thereof), or the fair market value of Take-Two, Zynga, the Take-Two common stock, or Zynga common stock. In addition, LionTree expressed no opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors, or employees of any parties to the merger, or any class of such persons, whether relative to the merger consideration to be paid pursuant to the merger or otherwise. LionTree’s opinion letter should not be construed as creating any fiduciary duty on the part of LionTree (or any of its affiliates) to any party. LionTree expressed no opinion as to what the value of the Take-Two common stock will be when issued pursuant to the merger, the prices at which the Zynga common stock or Take-Two common stock will trade at any time, or the potential effects of volatility in the credit, financial, and stock markets on Take-Two, Zynga, or the combination.

In rendering its opinion, LionTree assumed, with the consent of the Take-Two board of directors, that except as would not be in any way meaningful to LionTree’s analysis: (i) the final executed form of the merger agreement would not differ from the draft execution version that LionTree reviewed, (ii) the representations and warranties of the parties to the merger agreement, and the related merger documents, are true and correct, (iii) the parties to the merger agreement, and the related merger documents, will comply with and perform all covenants and agreements required to be complied with or performed by such parties under the merger agreement and the related merger documents, and (iv) the merger will be consummated in accordance with the terms of the merger agreement and related merger documents, without any waiver or amendment of any term or condition thereof. LionTree also assumed, at the direction of the Take-Two board of directors, that all governmental, regulatory, or other third-party consents and approvals necessary for the consummation of the merger or otherwise contemplated by the merger agreement would be obtained without any adverse effect on Zynga, Take-Two, or on the expected benefits of the merger in any way meaningful to LionTree’s analysis.

LionTree’s opinion was provided for the benefit of the Take-Two board of directors (in its capacity as such) in connection with, and for the sole purpose of, its evaluation of the merger, and did not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to the merger or any other matter.

In rendering its opinion to the Take-Two board of directors, LionTree performed a variety of analyses, including those described below. The summary of LionTree’s analyses is not a complete description of the analyses underlying LionTree’s opinion. The preparation of a fairness opinion involves various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. Consequently, neither a fairness opinion nor its underlying analyses is readily susceptible to summary description. LionTree arrived at its opinion based on the results of all analyses undertaken by it, assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor and did not attribute any particular weight to any analysis or factor it considered. Accordingly, LionTree believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create a misleading or incomplete view of the process underlying LionTree’s analyses and opinion. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

In performing its analyses, LionTree considered general business, economic, industry, regulatory and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of

 

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its opinion. LionTree’s analyses involved judgments and assumptions with regard to general business, economic, industry, regulatory and market conditions, financial and otherwise, and other matters, many of which are beyond the control of the parties to the merger agreement, such as the impact of competition on the business of the parties and on the industry generally, industry growth and the absence of any material change in the financial condition and prospects of the parties or the proposed merger, and an evaluation of the results of those analyses is not entirely mathematical. LionTree believes that mathematical derivations (such as determining mean and median) of financial data are not by themselves meaningful and should be considered together with qualities, judgments, and informed assumptions. The estimates contained in the forecasts and the implied reference range values indicated by LionTree’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. Additionally, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the parties. Much of the information used in, and accordingly the results of, LionTree’s analyses are inherently subject to substantial uncertainty.

LionTree’s opinion was provided to the Take-Two board of directors in connection with its evaluation of the merger and was only one of many factors considered by the Take-Two board of directors in evaluating the merger. Neither LionTree’s opinion nor its analyses was determinative of the merger consideration selected for the merger or of the views of the Take-Two board of directors or Take-Two’s management with respect to their decision to pursue the merger or the merger consideration to be received thereunder. The type and amount of consideration payable in the merger were determined through negotiation between Take-Two and Zynga, and the decision to enter into the merger agreement was solely that of the Take-Two board of directors. LionTree did not recommend any specific type or amount of consideration to Take-Two or the Take-Two board of directors, nor did it recommend that any specific type or amount of consideration constituted the only appropriate merger consideration for the merger.

The Take-Two board of directors selected LionTree as its financial advisor because LionTree is an internationally recognized investment banking firm that has substantial experience in mergers similar to this merger, and because of its significant prior experience with the industries in which Take-Two and Zynga operate. As compensation for its services, Take-Two has agreed to pay LionTree a fee of $34.0 million in the aggregate, of which $3.0 million was payable upon delivery of LionTree’s opinion and $31.0 million is contingent and payable upon the effective time. Take-Two has also agreed to reimburse LionTree for certain of its expenses arising, and indemnify LionTree against certain liabilities that may arise, out of LionTree’s engagement. In the two years prior to the date of LionTree’s opinion, neither LionTree nor its affiliates have provided investment banking services to Zynga, Take-Two, or any of their respective affiliates. In the ordinary course of business, certain of LionTree’s employees and affiliates, or entities in which they have invested, may hold or trade, for their own accounts and the accounts of their investors, securities of Zynga and Take-Two, and, accordingly, may at any time hold a long or short position in such securities. The issuance of LionTree’s opinion was approved by an authorized committee of LionTree.

Financial Analyses of Take-Two’s Financial Advisors

The following summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan and LionTree (collectively, “Take-Two’s financial advisors”). The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Take-Two’s financial advisors believe that the following summary and their analyses must be considered as a whole and that selecting portions of the following summary and these analyses, without considering all of their analyses as a whole, could create an incomplete view of the processes underlying the analyses and their respective opinions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described below were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of Take-Two’s financial advisors with respect to the actual value of Zynga or Take-Two. The order of analyses described does not represent the relative importance or weight

 

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given to those analyses by Take-Two’s financial advisors. In arriving at their opinions, Take-Two’s financial advisors did not attribute any particular weight to any analyses or factors considered by it and did not form opinions as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support their opinions. Rather, Take-Two’s financial advisors considered the totality of the factors and analyses performed in determining their respective opinions.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by Take-Two’s financial advisors are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, Take-Two’s financial advisors’ analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the below summary is identical or directly comparable to Zynga or Take-Two, as the case may be, and may have characteristics that are materially different from those of Zynga or Take-Two, as applicable, and none of the selected mergers reviewed was identical to the proposed merger. Certain of these mergers may have characteristics that are materially different from those of the proposed merger. However, the companies selected were chosen because they are publicly traded companies with operations and businesses which, for purposes of Take-Two’s financial advisors’ analysis, may be considered to be sufficiently analogous in certain respects to that of Zynga or Take-Two, or aspects thereof based on Take-Two’s financial advisors’ experience and familiarity with the industries in which the companies operate. The mergers selected were similarly chosen by Take-Two’s financial advisors, based on their experience and professional judgment, because their participants, size and certain other factors, for purposes of Take-Two’s financial advisors’ analysis, may be considered similar to the participants in size and certain other aspects of the proposed merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Zynga or Take-Two and the mergers compared to the proposed merger.

Public Trading Multiples Analysis

Zynga

Using publicly available information, Take-Two’s financial advisors compared selected financial and market data of Zynga with similar data for selected publicly traded companies engaged in businesses which, for purposes of their analysis, Take-Two’s financial advisors considered to be sufficiently analogous to Take-Two’s business, including the following selected companies (“Zynga selected companies”):

 

   

Activision Blizzard, Inc.

 

   

Electronic Arts Inc.

 

   

Applovin Corporation

 

   

Netmarble Corp.

 

   

Playtika Holding Corp.

 

   

Stillfront Group

 

   

SciPlay Corporation

 

   

Modern Times Group MTG AB

None of the Zynga selected companies reviewed is identical or directly comparable to Zynga and may have characteristics that are materially different from those of Zynga. However, the Zynga selected companies were selected, among other reasons, because they are publicly traded companies engaged in operations and businesses which, for purposes of Take-Two’s financial advisors analysis, may be considered to be sufficiently analogous in

 

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certain respects to Zynga’s operations and businesses or aspects thereof based on Take-Two’s financial advisors experience and familiarity with the industries in which the companies operate. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the Zynga selected companies and other factors that could affect the Zynga selected companies differently than they would affect Zynga.

With respect to the Zynga selected companies, Take-Two’s financial advisors calculated, for each selected company, among other things, the ratio of enterprise value (calculated as equity value plus or minus, as applicable, net debt or net cash, plus preferred stock and non-controlling interest) to Wall Street research analyst median consensus estimates of adjusted earnings before interest, tax, depreciation and amortization, unburdened by stock based compensation expense (referred to in this section as “Adjusted EBITDA”), for each of the twelve-month periods ending March 31, 2023 and March 31, 2024 (referred to in this section as “EV/FY2023E Adjusted EBITDA” and “EV/FY2024E Adjusted EBITDA”, respectively). Financial estimates and market data for the Zynga selected companies were based on the Zynga selected companies’ public filings and information obtained from FactSet Research Systems (“FactSet”) as of January 7, 2022. Take-Two’s financial advisors also calculated EV/FY2023E Adjusted EBITDA and EV/FY2024E Adjusted EBITDA for Zynga, based on Wall Street research analyst median consensus estimates. Take-Two’s financial advisors observed that the EV/FY2023E Adjusted EBITDA multiples for the selected companies ranged from a low of 6.3x to a high of 28.3x (with a mean of 12.1x and a median of 10.3x), and the EV/FY2024E Adjusted EBITDA multiples for the selected companies ranged from a low of 5.8x to a high of 20.6x (with a mean of 10.8x and a median of 9.4x).

Based on the above analysis and other factors that Take-Two’s financial advisors considered appropriate based on their experience and professional judgment, Take-Two’s financial advisors selected an EV/FY2023E Adjusted EBITDA multiple reference range of 9.5x to 10.5x and an EV/FY2024E Adjusted EBITDA multiple reference range of 8.5x to 9.5x, and applied those multiple reference ranges to Zynga’s estimated Adjusted EBITDA for the twelve-month periods ending March 31, 2023 and March 31, 2024, respectively, as provided in the Zynga standalone projections as of December 2021. This analysis indicated the following ranges of implied equity values per share of Zynga common stock (in each case, rounded to the nearest $0.10), as compared to the implied value of the merger consideration of $9.86 per share of Zynga common stock (calculated by multiplying $169.19, the volume-weighted-average-price of Take-Two’s common stock for the three trading days ended January 7, 2022, by the midpoint of the exchange ratio provided for in the merger agreement of 0.0376x, and adding the cash consideration of $3.50 per share):

 

     Implied Equity Value Per

Share

     Low    High

EV/FY2023E Adjusted EBITDA

   $5.20    $5.80

EV/FY2024E Adjusted EBITDA

   $5.60    $6.30

Take-Two

Using publicly available information, Take-Two’s financial advisors compared selected financial and market data of Take-Two with similar data for selected publicly traded companies engaged in businesses which, for purposes of their analysis, Take-Two’s financial advisors considered to be sufficiently analogous to Take-Two’s business, including the following selected companies (“Take-Two selected companies”):

 

   

Activision Blizzard, Inc.

 

   

Electronic Arts Inc.

 

   

The Nexon, Co., Ltd.

 

   

Embracer Group AB

 

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Ubisoft Entertainment SA

 

   

CD Projekt S.A.

None of the Take-Two selected companies reviewed is identical or directly comparable to Take-Two and may have characteristics that are materially different from those of Take-Two. However, the Take-Two selected companies were selected, among other reasons, because they are publicly traded companies engaged in operations and businesses which, for purposes of Take-Two’s financial advisors analysis, may be considered to be sufficiently analogous in certain respects to Take-Two’s operations and businesses or aspects thereof based on Take-Two’s financial advisors experience and familiarity with the industries in which the companies operate. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the Take-Two selected companies and other factors that could affect the Take-Two selected companies differently than they would affect Take-Two.

With respect to the Take-Two selected companies, Take-Two’s financial advisors calculated, for each selected company, among other things, (i) the EV/FY2024E Adjusted EBITDA multiple, and (ii) the ratio of share price as of January 7, 2022 to Wall Street research analyst median consensus estimates of earnings per share for the twelve-month period ending March 31, 2024 (referred to in this section as “Forward P/FY2024E Adjusted Earnings Per Share”, respectively). Financial estimates and market data for the Take-Two selected companies were based the Take-Two selected companies’ public filings and information obtained from FactSet as of January 7, 2022. Take-Two’s financial advisors observed that the EV/FY2024E Adjusted EBITDA multiples for the selected companies ranged from a low of 7.5x to a high of 29.2x (with a mean of 13.7x and a median of 9.7x), and the Forward P/FY2024E Adjusted Earnings Per Share multiples for the selected companies ranged from a low of 14.5x to a high of 39.7x (with a mean of 20.2x and a median of 16.0x).

Based on the above analysis and other factors that Take-Two’s financial advisors considered appropriate based on their experience and professional judgment, Take-Two’s financial advisors selected an EV/FY2024E Adjusted EBITDA multiple reference range of 9.5x to 15.5x and an Forward P/FY2024E Adjusted Earnings Per Share multiple reference range of 14.5x to 21.5x, for Take-Two, and applied those multiple reference ranges to Take Two’s estimated Adjusted EBITDA for the twelve-month periods ending March 31, 2024 and Take-Two’s adjusted earnings per share for the twelve-month periods ending March 31, 2024, respectively, as provided in the Take-Two standalone projections. This analysis indicated the following ranges of implied equity values per share of Take-Two common stock, in each case, rounded to the nearest $0.10, as compared to the $164.60 closing stock price of Take-Two common stock as of January 7, 2022:

 

     Implied Equity Value Per
Share
 
     Low      High  

EV/FY2024E Adjusted EBITDA

   $ 108.70      $ 164.80  

Forward P/FY2024E Adjusted Earnings Per Share

   $ 108.90      $ 161.40  

Transaction Multiples Analysis

Using publicly available information, Take-Two’s financial advisors examined a number of transactions announced in 2015 or later involving companies that, for purposes of Take-Two’s financial advisors’ analysis and based on their experience and professional judgment, were considered similar to Zynga’s business.

 

Date Announced

  

Acquirer

  

Target

November 2015

   Activision Blizzard    King Digital (1)

June 2016

   Tencent    Supercell (1)

July 2016

   Giant Network    Playtika (1)

April 2017

   DoubleU Games    DoubleDown

August 2017

   Aristocrat    Plarium

November 2017

   Aristocrat    Big Fish

 

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Date Announced

  

Acquirer

  

Target

December 2018

   Zynga    Small Giant (1)

December 2020

   Electronic Arts    Codemasters

December 2020

   Modern Times Group    Hutch (1)

February 2021

   Embracer Group    EasyBrain

February 2021

   Electronic Arts    GLU

June 2021

   Electronic Arts    Playdemic

August 2021

   Playtika    Reworks (1)

 

(1)

This transaction was included for purposes of LionTree’s analysis, but was included for reference only for purposes of J.P. Morgan’s analysis.

None of the selected transaction reviewed was identical to the proposed merger. Certain of these transactions may have characteristics that are materially different from those of the proposed merger. However, the transactions selected were chosen because the participants in and certain other aspects of the transactions, for purposes of Take-Two’s financial advisors’ analysis, may be considered similar to the participants in and aspects of the merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the transactions differently than they would affect the merger.

Take-Two’s financial advisors calculated, for each selected transaction, among other things, the ratio of the enterprise value implied by the consideration paid in such transaction (calculated as described above) to the target company’s Adjusted EBITDA for the last twelve calendar-month period prior to the announcement of the applicable transaction (referred to in this section as “EV/LTM Adjusted EBITDA”). Financial information for the target companies was based on press releases, information obtained from FactSet, and the target companies’ public filings, including filings made in connection with the applicable selected transaction. J.P, Morgan observed that the EV/LTM Adjusted EBITDA multiples for the selected transactions ranged from a low of 9.1x to a high of 29.9x (with a mean of 16.8x and a median of 11.9x). LionTree observed that the EV/LTM Adjusted EBITDA multiples for the selected transactions ranged from a low of 5.7x to a high of 29.9x (with a mean of 11.6x and a median of 14.7x).

Based on the results of this analysis and other factors that Take-Two’s financial advisors considered appropriate based on their experience and professional judgment, Take-Two’s financial advisors selected an EV/LTM Adjusted EBITDA multiple reference range of 10.0x to 30.0x, and applied that multiple reference ranges to Zynga’s estimated Adjusted EBITDA for the twelve-month period ending March 31, 2022, as provided in the Zynga standalone projections as of December 2021. This analysis indicated a range of implied equity values per share of Zynga common stock (rounded to the nearest $0.10) of $5.00 to $15.70, as compared to the implied value of the merger consideration of $9.86 per share of Zynga common stock.

Discounted Cash Flow Analysis

Take-Two’s financial advisors performed separate discounted cash flow analyses of Zynga and Take-Two for the purpose of determining ranges of implied equity values per share of Zynga common stock and Take Two common stock.

Zynga

Take-Two’s financial advisors performed a discounted cash flow analysis of Zynga using the unlevered, after-tax free cash flows that Zynga was forecasted to generate from January 1, 2022 through December 31, 2024, as provided in the Zynga standalone projections as of December 2021, with and without taking into account the synergy projections that were expected to result from the merger during the applicable periods from April 1, 2022 through March 31, 2027. For purposes of these analyses, stock-based compensation was treated as a cash expense, and the impact of potential cash proceeds from capped-call unwind were excluded at the direction of Take-Two management.

 

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Take-Two’s financial advisors calculated a range of implied terminal values for Zynga by applying to the unlevered, after-tax free cash flows that Zynga is forecasted to generate in the terminal year, as provided by Take-Two management, to a selected range of perpetuity growth rates of 1.50% to 2.50%, as provided by Take-Two management. The unlevered free cash flows and the range of terminal values, in each case, with and without synergy projections, were then discounted to present values, as of December 31, 2021, using a selected range of discount rates of 6.50% to 7.50%, which were chosen by Take-Two’s financial advisors based upon an analysis of the weighted average cost of capital of Zynga. This analysis indicated ranges of implied equity values per share of Zynga common stock (rounded to the nearest $0.10), of $7.40 to $11.10 without accounting for synergies and $10.70 to $16.00 including synergies, as compared to the implied value of the merger consideration of $9.86 per share of Zynga common stock.

Take-Two

Take-Two’s financial advisors performed a discounted cash flow analysis of Take-Two using the unlevered, after-tax free cash flows that Take-Two was forecasted to generate from January 1, 2022 through March 31, 2025, as provided in the Take-Two standalone projections. For purposes of these analyses, stock-based compensation was treated as a cash expense.

Take-Two’s financial advisors calculated a range of implied terminal values for Take-Two by applying to the unlevered, after-tax free cash flows that Take-Two is forecasted to generate in the terminal year, as reflected in the Take-Two standalone projections, to a selected range of perpetuity growth rates of 2.50% to 3.50% as provided by Take-Two management. The unlevered free cash flows, and the range of terminal values were then discounted to present values, as of December 31, 2021, using a selected range of discount rates of 6.50% to 7.50%, which were chosen by Take-Two’s financial advisors based upon an analysis of the weighted average cost of capital of Take-Two. This analysis indicated a range of implied equity value per share of Take-Two common stock (rounded to the nearest $0.10) of $151.50 to 238.50, as compared to the $164.60 closing stock price of Take-Two common stock as of January 7, 2022.

Relative Value Analysis

Based upon the range of implied equity values for shares of common stock of each of Zynga and Take-Two derived pursuant to the “—Public Trading Multiples Analysis” and “—Discounted Cash Flow Analysis” described above, Take-Two’s financial advisors calculated ranges of implied exchange ratios of a share of Zynga common stock to a share Take-Two common stock and then compared those ranges of implied exchange ratios to the range of exchange ratios provided in the merger agreement of 0.0350x to 0.0406x.

For each of the analyses referred to above, Take-Two’s financial advisors calculated the ratio implied by dividing the low end of each implied equity value per share of Zynga common stock by the high end of each implied equity value per share of Take-Two common stock. Take-Two’s financial advisors also calculated the ratio implied by dividing the high end of each implied equity value per share of Zynga common stock by the low end of each implied equity value per share of Take-Two common stock. Take-Two’s financial advisors adjusted each resulting exchange ratio for the cash consideration pursuant to the merger agreement of $3.50 per share.

This analysis implied the following ranges of exchange ratios, compared in each case to the range of exchange ratios provided in the merger agreement of 0.0350x to 0.0406x:

 

Comparison

  

Range of Implied
Exchange Ratios

Public Trading Multiples Analysis

  

FV/2024E Adjusted EBITDA

   0.0129x – 0.0262x

Discounted Cash Flow Analysis

  

With Synergies

   0.0302x – 0.0825x

Without Synergies

   0.0162x – 0.0504x

 

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Value Creation Analysis

Take-Two’s financial advisors conducted an analysis of the theoretical value creation to the existing holders of Take-Two Shares that compared the implied equity values per share of Take-Two common stock and Zynga common stock on a standalone basis (based on the midpoint implied equity value per share derived pursuant to the “Discounted Cash Flow Analysis” described above) to the implied equity value per share of Take-Two common stock on a pro forma basis, giving effect to the proposed merger. Take-Two’s financial advisors derived an implied equity value for Take-Two on a pro forma basis, giving effect to the proposed merger, by calculating the sum of (i) the midpoint of implied equity values for Take-Two derived pursuant to the “—Discounted Cash Flow Analysis—Take-Two” described above, plus (ii) the midpoint of implied equity values for Zynga derived pursuant to the “Discounted Cash Flow Analysis—Zynga”, plus (iii) the midpoint estimated present value of the expected cost synergy projections, plus (iv) the midpoint estimated present value of expected revenue synergy projections plus (v) the face value of the convertible notes, less (vi) the amount of cash to be paid to Zynga stockholders (including former holders of the convertible notes) as consideration pursuant to the merger agreement, less (vii) transaction expenses, as estimated by Take-Two management. The value creation analysis at the range of exchange ratios provided for in the merger agreement of 0.0350x to 0.0406x indicated value creation to the holders of Take-Two common stock of 4.9% at the low end of the range and 10.0% at the high end of the range. There can be no assurance that the synergy projections, merger-related expenses and other impacts referred to above will not be substantially greater or less than the Take-Two estimate described above.

Discounted Cash Flow Accretion Dilution Analysis

Take-Two’s financial advisors performed discounted cash flow accretion/dilution analysis by comparing the implied range of equity values for shares of Take-Two common stock on a standalone basis, as discussed above, to the implied range of equity values for shares of Take-Two common stock on a pro forma basis, giving effect to the proposed merger, and taking into account the synergy projections, derived pursuant to the “—Discounted Cash Flow Analysis—Take-Two” described above, and the “—Discounted Cash Flow Analysis—Zynga”, taking into account the synergy projections. The analysis indicated approximate accretion that could potentially result from the merger at the midpoint exchange ratio provided for in the merger agreement of 0.0376x, ranging from 5.8% to 8.4%.

Opinion of Zynga’s Financial Advisor

Opinion of Goldman Sachs & Co. LLC

At a meeting of the Zynga board of directors held on January 9, 2022, Goldman Sachs rendered its oral opinion, subsequently confirmed by delivery of its written opinion, dated January 9, 2022, to the Zynga board of directors that, as of the date of the written opinion and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be paid to the holders (other than Take-Two and its affiliates) of shares of Zynga common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated January 9, 2022, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex D. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Zynga board of directors in connection with its consideration of the transaction contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to how any holder of Zynga’s Class A common stock should vote with respect to the combination or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

   

the merger agreement;

 

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the annual reports to stockholders and Annual Reports on Form 10-K of Zynga for the five fiscal years ended December 31, 2020;

 

   

the annual reports to stockholders and Annual Reports on Form 10-K of Take-Two for the five fiscal years ended March 31, 2021;

 

   

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Zynga and Take-Two;

 

   

certain other communications from Zynga and Take-Two to their respective stockholders;

 

   

certain publicly available research analyst reports for Zynga and Take-Two;

 

   

certain internal financial analyses and forecasts for Zynga prepared by Zynga management and approved for Goldman Sachs’ use by Zynga (which are defined as the “Zynga standalone projections as of December 2021” and summarized in the section “—Zynga Unaudited Prospective Financial Information”);

 

   

certain internal financial analyses and forecasts for Take-Two standalone prepared by Take-Two management as approved for Goldman Sachs’ use by Zynga (which are defined as the “Take-Two standalone projections” and summarized in the section “—Take-Two Unaudited Prospective Financial Information”);

 

   

certain operating synergies projected by the management of Take-Two and Zynga to result from the combination (which are defined as the “synergy projections” and summarized in the section “—Take-Two Unaudited Prospective Financial Information”) in the form reflected in