Will EA raise its Take-Two offer?

Analysts are mixed on whether or not Electronic Arts would consider raising its bid for Take-Two from USD 26 per share, and if it should or not.

Wedbush Morgan's Michael Pachter thinks that the company could walk away if Strauss Zelnick continues to scorn offers at near the current level.

"EA has no real choice other than to withdraw its bid if shareholders do not accept USD 26 per share," he said. "We think that the company may choose to offer a small increase, perhaps USD 1—2 per share more, in order to complete a friendly takeover.

"However, we don't see the company dramatically increasing its bid over the near term. In the absence of a hostile bid, we think that EA will cool its heels and walk."

And Screen Digest's Ed Barton told GamesIndustry.biz that the clock is ticking on the deal.

"An increase in the offer depends on whether it will convince Take-Two to conclude the transaction before either of the key events of greatest significance to the short term economic rationale of the deal: the release of GTA IV and the roster of sports games scheduled for release in the second half of this year from both EA Sports and 2K Sports," he said.

"EA has already said that its offer is predicated on distributing GTA IV and there is little doubt that it would prefer to avoid its annual price war with 2K Sports over the glut of sports titles aimed at the US market.

"Forcing EA to wait until after these two events materially changes the economic rationale of the deal and, presumably, removes much of the impetus to offer a substantial premium to Take-Two shareholders."

Meanwhile Cowan's Doug Creutz told Gamasutra that he things EA could go as high as USD 32 per share if pushed.

"We think that these [Take-Two] shareholders are likely to view an offer above USD 30 as too compelling to leave on the table, given the time value of money and the ability to lock in a significant gain on a company that has had historically volatile stock and financial performance," he said.

"We think EA can justify a bid of up to USD 32 even assuming that the top talent at Take-Two's Rockstar Games leaves the companyâ¦[but] it is most likely that Rockstar's top talent would remain with EA, given EA management's new decentralized approach to managing development, the greater financial and distribution resources available at EA, and the desire to continue working on Rockstar's key (and very lucrative) IP, Grand Theft Auto."

Take-Two's executive chairman Strauss Zelnick has stated that he will not open further negotiations on a possible deal until the day after the release of Grand Theft Auto IV on April 29.

EA's previous bids of USD 25 and USD 26 per share have so far been rejected.