EA drops bid for Grand Theft Auto publisher, but joins talks

Electronic Arts, maker of some of the most popular digital sports games in the world, will allow its $2 billion bid for the publisher of popular game title Grand Theft Auto expire late Monday in the U.S., both companies said.

EA originally offered $26 per share for Take-Two Interactive Software back in February, a deal Take-Two rejected as too low. Later, EA made a tender offer directly to Take-Two shareholders at a lower price of $25.74 per share. The tender offer will expire at 11:59 p.m., Eastern Daylight Time.

But the potential remains for a new offer.

EA accepted a proposal by Take-Two to hear a presentation aimed at explaining why Take-Two believes EA's bids undervalue the company.

Take-Two will present a three-year product release schedule and financial projections, as well as discuss other underlying factors that drive the company, Take-Two said in a statement.

Take-Two reiterated that it remains in discussions with parties other than EA as well. The company has not divulged specifically who it is in talks with nor about what kind of deal.

In a letter to the head of Take-Two published on EA's Web site, EA CEO John Riccitiello signaled EA isn't very happy about the timing of the deal.

With the expiry of the tender offer, "we no longer believe we can integrate Take-Two ahead of the important holiday season," he said, noting EA will have to re-evaluate its position.

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