The publisher has not, however, raised its offer above $2 billion, or $25.74 per share, as the FTC's investigation process continues. Take-Two was recently asked to explain to the U.S. district court of Washington, D.C why it is refusing to fully comply with the commission's information request. Take-Two risks an injunction if it doesn't provide the full scope of info, which has been speculated to pertain to portions of its sports portfolio.

EA senior VP of corporate development Owen Mahoney congratulated Rockstar on Grand Theft Auto IV's successful launch, but maintained that despite the title's success, EA's offer "reflects a full and fair price based on the long-term value of Take-Two's entire operation."

When Kotaku spoke to Mahoney about the deal, he said that the longer the process goes on - both Take-Two's resistance and possible delays due to FTC investigations - the less valuable it is to EA. That was back in April, and it's now June.

Plus, EA's agreement with the FTC means the publisher will wait 45 days beyond the time that compliance by both parties is determined to be complete, which drags the process out even further. Is time still a factor?

"That's every bit as true today as when Owen said it a couple of months ago," said EA VP of corporate communications Jeff Brown. "Time erodes the value of this deal."

The FTC has asked to review a large volume of information across two separate requests; for EA's part, Brown says that it's taking them some time to put the information together. "It is our intention to [fully comply]," he said. "There's no dispute on our side."

Take-Two board chairman Strauss Zelnick recently made some bold comments at an investor event, claiming that its portfolio, particularly in the contentious sports arena, out-rates EA's in a head-to-head comparison, information that, if true, might suggest that EA needs a higher offer to seal the deal.

"It seems like Strauss has been playing football without a helmet; he needs to check his numbers," said Brown.

Kotaku has requested comment from Take-Two, and will update with any response we receive.

As of today, only an insignificant portion of Take-Two shares - 6,139,824, or 7.9 percent of the total - have been tendered to EA.

Said Zelnick, "The latest extension of EA's unsolicited, highly conditional tender offer does not alter the fact that their proposal still significantly undervalues Take-Two, a fact that is reflected in the overwhelming number of stockholders who still have not tendered their shares."

"Our Board of Directors remains in unanimous agreement that the proposal is contrary to the best interests of Take-Two stockholders, and the Board continues to recommend that stockholders not tender their shares to EA. The Board remains focused on the strategic process that began formally on April 30 to consider all alternatives to maximize value. We believe that these alternatives, which may include a business combination or remaining independent, will deliver greater value to stockholders than the current EA offer."

We know that, as we speak, the FTC is thoroughly investigating the possible takeover of Take-Two by Electronic Arts, to be sure that there are no antitrust issues. The FTC first made one request for information, and then a second one, indicating they're analyzing the deal very closely.

EA cut a deal with the FTC by which it consented to a 15-day extension on the investigation period, making it 45 days, and in return the publisher agreed it wouldn't move to acquire Take-Two until the investigation was closed or until the 45 days expired.

Newsweek's Level Up legal affairs columnist, former FTC lawyer Justin Blankenship, wrote a new piece trying to pin down exactly what issues the FTC might be looking at. Though the specifics are not public record and not likely to be sussed out easily, Blankenship learned a few details - like where the FTC's greatest area of concern likely is, and whether Take-Two is risking a legal injunction to stonewall EA:

For one thing, a second request from the FTC is a fairly rare occurrence and often demands a mountain of information from the companies involved - in fact, Take-Two has resisted answering the request on the grounds that it's just too much unnecessary stuff and would cost them too much time and money.

But Blankenship's details suggest there might be more to that story:

The gist of it appears to be that Take-Two had an agreement with the FTC to search for responsive documents in the files of certain individuals. But after hiring a new law firm, Take-Two has apparently reneged on that initial agreement, and has on several occasions narrowed the scope of the search that it is willing to perform even further.

Although the target of an FTC investigation has some grounds to object to a second request on the basis that it's unduly burdensome, the Horwitz affidavit tells the story of a corporation that's gone beyond making good faith objections based on scope. Take-Two appears to be simply stonewalling.

It's certainly a viable speculation that Take-Two is simply buying time in order to hold off EA after negotiations have fallen apart. The Federal Court has already demanded to know why Take-Two hasn't ponied up the info - and if they continue to withhold, the FTC could seek a preliminary injunction in Federal Court, which could delay the acquisition until the FTC gets what it wants - but not permanently.

It actually doesn't make a lot of sense for Take-Two to do that, as Blankenship's article explains:

You would think that as the unwilling target of EA, it would be in Take Two's best interests to hand everything over to the FTC as soon as possible with every incriminating quote already highlighted, complete with its own commissioned economic study about how EA would destroy competition in sports videogames, all wrapped up with a pretty red bow.

As all of the commenters here at Kotaku who've been following this story have speculated:

Not surprisingly, the FTC's investigation appears to be focused on "competing titles for simulated sports games, including basketball, football, hockey, and baseball."

Specifically, said Blankenship, with Take-Two holding the Major League Baseball exclusive while EA's got Madden, consolidating the basketball and hockey overlap just might choke the competition out of the sports game genre.

The Law and the Short of It: Level Up Legal Affairs Columnist Justin Blankenship Returns to the Scene of Electronic Arts' Bid For Take-Two [Level Up]

"At the time of EA's highly conditional, unsolicited tender offer, we emphasized our board's commitment to explore all strategic alternatives, including remaining independent, and pursuing business combinations with third parties... we're actively engaged in that process now."

"In fact, we have had and continue to have formal discussions with a number of interested parties," Zelnick said.

Zelnick's comments follow numerous earlier statements he'd made that Take-Two would entertain talks with Electronic Arts following April 30th, but he declined to specify in detail who the other interested parties might be or what stage the discussions were at. When questioned by an analyst, Zelnick clarified that they were "discussions, not negotiations."

Under the agreement, no transaction will be completed until the FTC has finished its probe, which can take up to 45 days instead of the customary 30.

"We've entered an agreement with the FTC to modify the scope," said an EA spokesperson. "This is a normal part of the review process, which allows us to move through the review as expeditiously as possible while giving the FTC additional time in which to complete its full review and work."

At the time EA last extended its tender offer until June 16th, corporate development VP Owen Mahoney said the extension would allow the FTC further time to complete its investigation. However, there are only 7 business days between now and the expiration of EA's current offer, not 45 - so it's reasonable to infer EA will extend its offer again to allow the FTC to fully complete its probe.

EA declined to comment on plans to extend the offer, but the spokesperson said, "You'll hear from us on or before the expiration."

The FTC also does not comment on the specific details of individual investigations.

A peek at recent SEC filings reveals another item of interest: When EA made its most recent deadline extension, its third, it stated that 6,210,261 shares of Take-Two stock had been tendered to EA as of May 16th. That's only a small percentage of what EA would need to acquire a majority - but its even less than they used to have.

At the time of the second extension, as of April 17th 6,432,787 shares had been tendered - which seems to suggest that 222,526 shares have gone back to Take-Two. Granted, those 222,526 shares are statistically tiny in the grand scheme of things, but even a small loss of stake seems an inauspicious sign for a company making a hostile bid.

On the other side of the coin:

The rise-and-fall pattern of Take-Two's stock seems nonetheless to follow the movements of EA. It traded at only about $17 per share at the time EA announced its bid, and only began to climb thereafter. The stock has seen highs just ahead of each bid deadline, and began its ascent to its current high just after EA announced it had borrowed $1 billion to give it "options" in financing the possible acquisition. Wedbush Morgan analyst Michael Pachter has suggested previously that such stockholder patterns might indicate anticipation for the completion of a successful transaction.

The record-setting launch of GTA IV failed to have a noticeable impact on the share price, either, lending credence to the perspective that, failing an acquisition by EA, Take-Two's stock would lose a great deal of the value it gained on the possibility.

EA has stated publicly on numerous occasions that this latest extension will allow the FTC to continue reviewing the potential business combination, and EA has also said that the longer this fight drags out, the less likely it is they'll pursue it, no matter what the reason for delay is.

"The thing for us is that further delays... could affect the value of our offer," corporate development VP Owen Mahoney told Kotaku in April. That statement appears to be proven accurate, as the degree to which Take-Two's share price outvalues EA's offer continues to increase, while Take-Two continues planning ways to raise the less-concrete but nonetheless essential value of its owned IP - the announcement of a BioShock film, for example, certainly supports potential for sustained future growth for Take-Two.

So does this mean things look bad for EA's bid? Not necessarily.

Wedbush Morgan analyst Michael Pachter said that there are still many conditions to satisfy before a conclusion can be expected. Chief among these is the "poison pill" that Take-Two's management implemented. The board adopted a measure that says that anybody who buys more than 20 percent of the company's shares after April 7th is limited in the number of votes they get in the company. In other words, if EA won the company, they wouldn't be able to control it.

"Nobody will tender until all conditions are satisfied," Pachter told Kotaku. "The biggest is defeating the poison pill, so you should not expect the shares tendered to remain tendered. Those that were tendered subject to the closing condition
(which has NOT been met) are free to withdraw their tender and sell at a higher price in the open market."

Calling the back-and-forth shareholder trading continuing at present "pretty irrelevant," Pachter said he expects plenty of people to tender to EA once all the conditions up in the air are satisfied.

"At the conclusion of this process, it will end up as a friendly deal at a higher price," Pachter said.

First off, there's no shame in being the type whose eyes glaze over every time you hear something to do with "the market" or "analysts" or "diluted shares," and since this ongoing saga contains these phrases at several junctions, you may want to start with the easy, albeit detailed, summary of the whole works we recently wrote for you.

Still with me? Hit the jump for your handy roundup of our recent coverage:

To summarize, EA believes it's made a "full and fair" offer for Take-Two at $26 per share; Take-Two says it's not enough, and that's where the two have stood ever since the offer was made in February. EA's initial deadline to seal the deal expired on April 18th; EA then modded its offer with an extension that will hold them until Friday.

A couple of things have changed since the saga began. First, many expected the record-breaking release of GTA IV to be a game-changer; it wasn't, despite what Take-Two board chairman Strauss Zelnick said, save for a handful of change gained on Take-Two's per share price, which has been vacillating around the $26 price point since EA's offer. Before EA made its bid, Take-Two seemed stuck at $17 a share.

Second, EA's $2 billion dollar offer is now worth less per share than it was at first, thanks to some extra shares handed out as part of Take-Two's management compensation package. The new $25.74 per share price is due to dilution, not a reduction on EA's part - but it still presents an additional obstacle, considering that Take-Two's stock has remained higher than that for a few weeks now.

Both companies are taking a hard line, and all tricky issues of monetary valuations aside, each has a valid viewpoint. Zelnick believes Take-Two's current lineup and stable of talent gives it much more value than the EA bid gives it credit for, and he made an uncharacteristically impassioned plea to this effect during Take-Two's annual shareholder meeting.

EA, on the other hand, is playing it cool, noting during its own annual meeting yesterday that its sports portfolio is robust, its "city-state" label structure is diverse, and that it has no need to break its back to gain Take-Two. EA has also said repeatedly that the longer this battle goes on, the less it's all worth to them, despite feeling that Take-Two's are "some of the best studios in the world."

Most recently, EA borrowed $1 billion in extra capital from several lenders to afford them "maximum flexibility." Following that announcement, Take-Two's stock made a climb to $27 per share, indicating investors feel EA's bid looks likely.

Cowen and Co. analyst Doug Creutz recently put the odds of the deal going through at 80/20, for example, provided EA raises the offering price one more time. Wedbush Morgan's Michael Pachter doesn't think EA needs to offer more money without negotiating first, but both analysts agree that the deal has too much upside for both parties to walk away.

Will the delay-despising EA extend its offer once again at the end of this week, or will it extend and raise it, as some analysts have told us they must - and can afford to? We'll see.

"There's no news here," said EA VP of communications Jeff Brown. "This is just a process point on something we announced in February."

With $2.3 billion on hand in cash, cash equivalents and short-term investments, EA already has the funds available to do the deal as it currently stands. With the deal not contingent on financing, why borrow more money?

"It helps us maintain maximum flexibility for any opportunities," said Brown.

Take-Two had no comment as of press time.