We remain convinced that EA will prevail in its bid for Take-Two. We envision a scenario whereby EA receives FTC approval for the combination some time in the next two months, and expect EA to make a last ditch effort to complete a deal by September. However, due to the delays caused by a slow government approval process, we think that Take-Two's poison pill (adopted in early April) will keep EA from completing its hostile takeover. We think that EA will increase its bid by a modest amount (likely $2 or so), and attempt to complete a friendly deal. However, given Take-Two management's comments about formal discussions with suitors, we expect management to reject EA's offer. Barring a friendly deal, we expect EA to walk away.

Ultimately, we think EA will make a deal happen. We don't expect the company to overpay, particularly since it doesn't really have to do so. We believe that once EA walks away and no other bidders materialize, it will be able to allow all parties to cool their heels, and will be able to come back and complete the deal at a reasonable price.