EA raises the ante for rival

Buying Take-Two would provide EA with a genre known as "open world action," in which players have fewer set paths within the game and more freedom to choose what their characters do. It also would give EA control over Take-Two's 2K Sports label, EA's only significant rival in the highly lucrative sports game category. "That alone justifies the deal," Pachter said.

EA had initially offered $25 a share. After being rebuffed, Riccitiello hiked his offer to $26, saying that EA was unlikely to further increase its price.

"There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today," Riccitiello wrote in a Feb. 19 letter to Take-Two's Zelnick.

Riccitiello indicated his desire to cinch a deal shortly after the release of "Grand Theft Auto IV," the latest title in Take-Two's billion-dollar franchise, so that EA could "positively impact the catalogue sales of GTA IV and also the launch and sale of titles released later this year."

Zelnick said his company proposed talks after April 29 to avoid disrupting the release of the latest addition to the company's most important franchise.

"They rejected that," he said. "I find it sort of stunning from a company that's presenting itself as a friend of creativity."

Take-Two's shares have slumped 12% over the last year, closing at $17.36 on Friday. In August the company announced a significant delay in "Grand Theft Auto IV," which had been expected before the crucial holiday shopping season.

The delay was a setback for the management team that commandeered Take-Two in a boardroom coup last March after a series of executive scandals and poor financial performance at the company enraged investors.

A consortium of shareholders that together controlled 46% of Take-Two's stock ousted the company's board and top management and installed its own team, including Ben Feder as chief executive and Zelnick as nonexecutive chairman. Zelnick was named executive chairman Feb. 15.

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alex.pham@latimes.com

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Comparing the players in the field

Electronics Arts Inc.

Popular franchises: "Madden Football," "The Sims" and "Need for Speed"

Market value: $15.8 billion

2007 revenue (fiscal year ended March 31): $3.1 billion

2007 net income: $76 million

Headquarters: Redwood City, Calif.

Take-Two Interactive Software Inc.

Top franchises: "Grand Theft Auto," "BioShock," "Major League Baseball 2K8"

Market value: $1.3 billion

2007 revenue (fiscal year ended Oct. 31): $982 million

2007 net loss: $138.4 million

Headquarters: New York

Source: Times research

Los Angeles Times