Take-Two Declares Its Independence

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Don't be on the lookout for Take-Two Interactive (Nasdaq: TTWO) in the HOV carpool lane. The Grand Theft Auto IV bad boy is driving home alone.

The video-game company has concluded its strategic review. After pondering the possibilities in the wake of its flirtation with Electronic Arts (Nasdaq: ERTS), Take-Two has decided that remaining independent is the way to go.

It's just as well. Electronic Arts was offering to buy the company behind this year's hottest-selling video game at a price that would have been highly accretive to EA's bottom line. Take-Two had every right to hold out for more, even if today's share price is sharply lower than even EA's meager buyout offer.

I am surprised. I figured that several other companies would be eager for a chance to land Take-Two.

• Microsoft (Nasdaq: MSFT) certainly has the greenbacks, and buying Take-Two would have allowed it to lock up franchises such as GTA and BioShock as Xbox-exclusive properties.
• Sony (NYSE: SNE) could have benefited from a purchase, especially when its PS3 console isn't a market-beater the way its PS2 was. Its PSP handheld also could have used the exclusive-content push.
• Viacom (NYSE: VIA) has had a nice taste of video-game success with its Rock Band game. Having Take-Two on its arm would have made the parent company behind MTV, Nickelodeon, and Paramount an industry leader. It also would have been cool to see one company watch over both Pimp My Ride and Grand Theft Auto.
• Activision Blizzard (Nasdaq: ATVI) still has its hands full over its huge combination, but Take-Two would have been the last ingredient to push it past EA, perhaps for keeps, as the world's top video-game company.

None of those scenarios materialized, of course.

Anyway, you still have to like Take-Two as an independent. Analysts see the company earning $2.12 a share this year and price the stock at a ridiculously low seven times this year's earnings. Wall Street sees profits dipping next year, but Take-Two is still an insane bargain at just 10 times next year's projected profitability.

The fact that the stock didn't tumble at the open -- the way companies typically do when they call off shotgun weddings -- shows that even a jaded market sees value in Take-Two at this point.

Speaking of shotguns, is it too late to call shotgun so Take-Two doesn't have to drive home alone?

Some songs for the Take-Two mix tape on the drive home:

• EA walked away from Take-Two last month.
• Its tender offers didn't come as tender or offers to Take-Two shareholders.
• What are you waiting for? Here's your shot to score big.