Electronic Arts has been making more noise recently as it tries to position itself to acquire Take-Two. While under new management, EA has been painstakingly shirking its old image of a big, cold corporate publisher with one that's more open to creativity and freedom. However this ping pong of exchanges could reverse all that effort if offers become less friendly.

This new found charm doesn't seem to be working anyway on Take-Two's executive board who accuse EA of undervaluing their company at $26 a share. They're not interested in even entertaining the notion until after the release of Grand Theft Auto IV (April 29) which is likely to dramatically increase Take-Two's bargaining position.



Take-Two's current response:

Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time… Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry…

Given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released.

Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release). We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA’s refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders.

With such an acquisition it would mean brands like 2K Sports, which provides a tangible alternative to EA Sports, would become effectively void with EA practically unrivalled in the genre. There is also Rockstar Studios to consider, they may not wish to remain part of Electronic Arts if they feel a cultural mismatch would harm their teams and their games, with titles like Grand Theft Auto not being considered creatively safe under the EA brand.

This is unlikely to be resolved anytime soon. EA, confident of an amicable deal in the near future, have brought a site online detailing CEO John Riccitiello's open letter to Take-Two which can be found at http://www.eatake2.com/.