As reported here Wednesday, Take-Two Interactive Software's (NDAQ: TTWO) board rejected Electronic Art's (NDAQ: ERTS) most recent buyout offer, saying that it was not in the best interest of shareholders. Instead, the company also confirmed that it would explore strategic alternatives to maximize shareholder value in other ways that could deliver a higher value than the current $2 billion EA offer.

In a strange move today, however, EA extended its $2 billion, or $26 per share, offer by a week while adding that a “poison pill” provision adopted this week by Take-Two be canceled or at least not apply to its current takeover attempt. A poison pill is a mechanism whereby new shares are issued in the face of a hostile takeover, thus raising the price of a takeover or making a takeover simply unfeasible.

EA's announcement is odd because it is acting as if Take-Two was pursuing it, not the other way around. "The actions of the Take-Two board may increase the risk for their stockholders by delaying a potential transaction," EA's Senior VP of Corporate Development Owen Mahoney said in a statement. "We continue to believe that our $26 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."

EA's offer was set to expire on April 11, but now will remain on the table until April 18. Even so, Take-Two has continually said the price is too low, especially with a new release of its immensely popular “Grand Theft Auto” game coming up.

Take-Two Chairman Strauss Zelnick said the poison pill provision was instituted to "ensure that the Take-Two board has adequate time to consider all strategic alternatives for maximizing value for Take-Two stockholders. The agreement will not, and is not intended to, prevent a takeover of the company on terms that are fair to and in the best interests of all stockholders." In other words: EA's offer is too low, so we are going to do everything in our power to kill it or drive the price up.

Today's announcement by EA really is nothing more than a PR ploy that does nothing to change the likelihood of a deal at the current $2 billion price. The announcement is good news from the perspective of a Take-Two shareholder because it is clear EA has continued interest in the deal, and if EA really wants to get a deal done it is going to have to be at a price above $26 per share.

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