Digital Trends

Take-Two executives are urging its investors not to take Electronic Arts up on its $26/share deal...at least until a better offer comes along and GTA IV is out the door.

In a fresh rejection, Take-Two Interactive is urging its investors not buy into Electronics Arts' $26-per-share offer to take over the game publishers…at least until after the hotly-anticipated Grand Theft Auto IV ships, or a better offer comes along.

"Our Board, after careful review, has unanimously determined that Electronic Arts' offer continues to provide insufficient value and remains opportunistically timed to capture the value of the upcoming Grand Theft Auto IV launch at the expense of our stockholders," said Take 2 CEO Strauss Zelnick, in a statement.

Take-Two also says it has other companies interested in possible partnerships, strategic alignments, or buyouts, but hasn't held any substantive talks. Take-Two says it would be open to a merger with EA or another buyer at the right time, and for the right price.

Take-Two feels that EA's $26-per-share offer significantly undervalues the revenue stream from Grand Theft Auto IV and Take-Two's other properties—and reports of higher-than-expected pre-orders for GTA IV might bear that out. (Take-Two stock is currently trading near $26 per share.) However, many industry watchers believe Take-Two's flat-out rejection of EA's offer is a dangerous gamble: it might succeed in making EA bump up its offer by a couple dollars per share, but if the deal falls through or GTA IV sales disappoint, Take-Two's share price could easily find itself on a downhill ride.

EA says it would operate Take-Two as an independent studio and let it continue to develop its often controversial game titles. However, fans of sports gaming are wary of the deal, since both companies offer competing sports titles that, in a combined company, would likely be winnowed down to just one per sport per year.