Take-Two Interactive Software, Inc. (NDAQ: TTWO) shares dropped sharply after Electronic Arts Inc. (NDAQ: ERTS) dropped its $2 billion hostile bid and instead opted to pursue private talks with the company. Shares fell during today's trading on concerns that EA would walk away entirely or come back with a lower bid. However, on the upside, analysts now believe that a deal will be more probable with friendly talks in the works.

Many analysts believe that EA is going to take a second look at the buyout since Take-Two's blockbuster "Grand Theft Auto" game will come out before any takeover could take place. After all, the original purchase price was predicated on the distribution of that game during Christmas of this year. As a result, the new offering price, if it is negotiated, may be lower than many investors expect. Others insist that the game will add value to the Take-Two takeover.

Many experts believe that GTA IV has already been priced into Take-Two's stock price. The video game has already sold some 11 million units and pulled in revenues of $500 million in its first week. As a result, the company has increased its estimates for fiscal 2008 revenues from a range of $1.4 billion to $1.5 billion from $1.25 billion to $1.4 billion. Take-Two has refused to sell the company before its release, although some analysts now believe a takeover should be closer to $28 per share.

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