Neither EA nor Take-Two would say whether the two sides are in active discussions on an acquisition. New York-based Take-Two in March rejected a $26 a share, or $2 billion, offer from EA and said it would not negotiate with any prospective buyer until after release of its "Grand Theft Auto IV" video game on April 29. Take-Two said the crime-themed video game sold 6 million units globally in its first week with an estimated retail value of more than $500 million.
Michael Pachter, an analyst with Wedbush Morgan Securities, said that although the two companies are likely talking, they remain far apart on Take-Two's valuation. Pachter speculates that Take-Two is asking for roughly $34 a share, or $2.6 billion, roughly double its closing price of $17.36 on Feb. 22, just before EA's offer was made public. EA is likely prepared to sweeten its tender offer of $25.74 by more than $2.00 per share, he said.
"The acid test now is does [EA CEO John] Riccitiello's ego allow him to walk away if they can't agree, or does deal lust drive him to make a deal at a higher price?" Pachter asked.
Take-Two shares closed Wednesday modestly lower at $26.26, suggesting investors expect EA to raise its bid. - David Shabelman
See the full story from The Daily Deal later Wednesday.
See Dealwatch: Take-Two
See Dealwatch: Yahoo!
Electronic Arts Inc.'s efforts to acquire Take-Two Interactive Software Inc. are drawing parallels to Microsoft Corp.'s pursuit of Yahoo! Inc. Whether the end result is the same will depend on how much the two video game publishers are willing to compromise. 
