Grand Theft Auto: EA City

Petty crime is part of the art in Take-Two Interactive's (Nasdaq: TTWO) Grand Theft Auto IV, now the fastest-selling video game of all time. Leave it to Electronic Arts (Nasdaq: ERTS) to try to steal the franchise away.

EA's tender offer for Take-Two came and went over the weekend. If you thought that the original $26-a-share cash offer didn't go over well last month, you can only imagine how the revised $25.74-a-share offer fared with the masses.

After the original offer expired, EA claimed that 6.4 million shares -- or roughly 8% of Take-Two's outstanding shares -- were tendered to the leading video game maker. This morning's release claims that just 6.2 million shares have been tendered. Aren't tender offer extensions supposed to increase an acquirer's stake? Why are shareholders coming back to Take-Two?

It's easy to see why 92% of the shares are sticking with Take-Two. Grand Theft Auto IV topped the $500 million mark in retail sales during its first week on the market. The fun is only getting started there, as Take-Two has deals in place to sell digitally delivered episodes through Microsoft (Nasdaq: MSFT) and MP3 songs through Amazon.com (Nasdaq: AMZN).   

It's not just about the GTA4 stampede; Take-Two is no longer a one-trick pony. Pirates of the Caribbean director Gore Verbinski is so smitten by the BioShock game that he's on board to bring it to a multiplex near you. Tack on sequels to Take-Two's sporting titles and the Wii-rific success of Carnival Games, and you begin to see why Take-Two won't go out at a valuation discount to its larger peers like EA or Activision (Nasdaq: ATVI).

The market is telling you the same thing, with Take-Two trading well above both the original $26 and the eventual $25.74 offers. It certainly doesn't help that last week's loss-riddled quarterly report out of EA makes it less likely that the company will be able to dig itself out of its hole organically.

EA is extending the tender yet again this morning. It will give it another month, under the assumption that it's waiting for the FTC to lend its regulatory blessing. If so, what's the point? Unless EA raises its offer -- considerably -- who is going to show up? What if you threw a buyout party and only 8% of the guests came?

Then again, the way even those party guests have been leaving in recent weeks, one has to wonder how much emptier this party will be come mid-June.