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Video game publisher ELECTRONIC ARTS said it will let its $2 billion buyout offer for smaller rival TAKE-TWO INTERACTIVE SOFTWARE expire Monday as it does not believe they can complete a
deal before the holiday shopping season. The news drove Take-Two shares down 5 percent, even though EA said the companies are still in talks on a potential deal after conversations between
EA Chief Executive John Riccitiello and Take-Two Executive Chairman Strauss Zelnick over the weekend. With no chance to add Take-Two's blockbuster "Grand Theft Auto" game to
EA's game roster by the end of the third quarter, EA said it was taking a second look at its $25.74-per-share offer. "That $25.74 was predicated on distributing their products at
Christmas this year," EA spokesman Jeff Brown said. "Going forward, we are challenged to validate that $25.74 price." EA, publisher of the popular "Madden" and
"Need for Speed" games, first pursued a deal for Take-Two privately last December. It announced an unsolicited offer of $26 a share in February. It cut the bid to $25.74 a share in
April because of the issuance of additional Take Two shares. Take-Two has rejected EA's bid as too low but said it was open to a deal with EA or another company. Take-Two's
management will make a presentation to EA on its three-year product release schedule and financial projections, Zelnick said in a letter to Riccitiello on Sunday. "The presentation also
includes information about the underlying factors that have driven our strong operational and financial performance. I believe our presentation will enable you to understand better the
value of our company to EA," Zelnick said in the letter. EA said that as a result of the weekend talks, it will let its tender offer for all outstanding shares of Take-Two expire Monday
evening. EA previously extended the offer five times, in part to allow regulators time to review the deal for antitrust concerns, and after a lukewarm response from Take-Two shareholders.
Take-Two shares fell $1.23 to $23.61 in early Nasdaq trade. The stock stood at around $17 in February, before EA's offer was announced. EA shares were off 4 cents $48.20 on Nasdaq.