Cat and mouse game continues for EA and Take-Two

EA's hostile takeover of Take-Two Interactive that began earlier this month has received an extension until the day before Grand Theft Auto IV is to be released.

This week, a defensive effort was adopted by Take-Two, which in the business vernacular is referred to as a "poison pill." Poison pills commonly take the form of stockholders' rights plans, which steer hostile takeover bids away from stockholders and back toward the board of directors.

It is the opinion of both Take-Two's board of directors and its bankers that EA's offer is insufficient.

The six-month poison pill Take-Two put into place prevents any single investor from acquiring more than 20 percent of the company's outstanding stock.

In response, EA has extended the expiration date of its common stock tender by another week to coincide with Take-Two's rescheduled annual meeting. In that time, EA hopes Take-Two will reconsider the poison pill and allow the takeover. EA has not amended its buyout offer, saying it is "full and fair."

EA is tapping its proverbial watch while Take-Two scrambles toward the release of GTA IV.