EA, Take-Two take talks behind closed doors

The two companies have signed a confidentiality agreement which should keep the details of the talks secret.

Take-Two would only discuss its future product plans with EA if it had some type of assurance that such discussions would be held in private. EA agreed, and took its hostile bid for its smaller rival off the table.

As a result, no further details of the status of talks may be provided unless the two sides either terminate discussions or reach a deal, a US Securities and Exchange Commission filing by EA indicates.

"As previously disclosed, EA now requires due diligence to support any proposal to acquire Take-Two and there can be no assurance that any proposal, negotiations or transaction will result," it added -- although the escalation of talks is certainly a positive sign.

Both sides have softened their stances within the past month. EA agreed to hear a presentation on the value of Take-Two by its management, and Take-Two said it had made a good deal of progress since EA first made a bid for the company.

Take-Two had rejected the company's initial offer of $2 billion, or about $25.74 per share in April, saying it undervalued the company.