EA offers $2 billion for Grand Theft Auto publisher

The EA bid, which wasn't made public until shortly before Take-Two announced its rejection Sunday, offered $26 cash per share for Take-Two. At the time the bid was made on Feb. 19, the price represented a 64 percent premium on Take-Two's Feb. 15 closing price of $15.83. It is currently a 49 percent premium on Take-Two's Friday closing price.

In its rejection the board of Take-Two said it judged the bid to be "inadequate in multiple respects."

"Electronic Arts' proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the company," Take-Two Chairman Strauss Zelnick said in a statement.

Take-Two is scheduled to release the latest installment in the popular Grand Theft Auto series, "Grand Theft Auto IV," on April 29. The release of "GTA IV" was slated for October last year, but was delayed in order to give the development team more time for certain game elements. The series has sold more than 65 million copies to date, and the company said that it wants to hold-off on talks with EA until after that game hits the market. Therefore it proposed to start talks on April 30.

EA had originally told Take-Two the offer was subject to Take-Two agreeing to start talks by Feb. 22, but it noted Sunday that it would hold the offer open "for the present time" in the hope that discussions can begin.

In an open letter to investors CEO John Riccitiello wrote EA believes its offer is a good one for Take-Two shareholders. He said Take-Two's future is uncertain and that "there is a strong likelihood that the company will be sold in the not-too-distant future."

"So, that's it. We've made a proposal to buy Take-Two. Our preference is to make this a friendly transaction and I'm hopeful we can achieve that. We've sent this proposal in the genuine belief that combining EA and Take-Two would be good for the people who make games and good for the people who play them," he wrote.