Take-Two Interactive Software Inc. undoubtedly would like to drum up another bidder to help boost the $1.9 billion offer price from rival video game maker Electronic Arts Inc. While the company most likely will fail in this endeavor, it still could coax more out of EA than the current $26 a share offer.

Take-Two disclosed in a regulatory filing on Feb. 28 that it had received "informal indications of interest" about a business combination since Redwood City, Calif.-based EA disclosed its offer on Feb. 24. However, Take-Two said it has neither received anything in writing, nor engaged in any "substantive discussions" with any party about an acquisition since, including EA.

Though Take-Two did not disclose specifics of who may have shown interest, there are a number of gaming companies, major media companies or gaming console manufacturers that could have kicked the tires. None, however, would be as good a fit as Electronic Arts.

"Few other companies would be able to match EA's offer due to the synergies that an EA/Take-Two combination would bring," Cowen and Co. LLC analyst Doug Creutz wrote in a research note Friday.

Creutz discounted Santa Monica, Calif., game publisher Activision Inc. as a potential buyer because it is trying to complete its merger with Vivendi SA. He lists French games maker Ubisoft Entertainment as the most likely strategic buyer, as Take-Two's strong U.S. distribution would complement Ubisoft's European operations, but still views a bid as "unlikely, as we believe growth via major acquisitions is not a direction favored by current Ubisoft management."

Media conglomerate Viacom Inc. has also been mentioned as a possible buyer for Take-Two, but appeared to take itself out of the running on Thursday. In a conference call to discuss the company's fourth quarter earnings, CEO Philippe Dauman was asked if the company had interest in Take-Two; he said he "doesn't anticipate participating in the battle between the pure game companies, who are interested in building up their scope."

Creutz said that EA acquiring Take-Two for between $30 and $32 a share is the most likely outcome, assigning a 40% probability to that result. He contends EA could pay into the $30s and still have the deal be accretive to earnings. The analyst places a 20% likelihood on each of the following outcomes: Take-Two accepts a bid for between $27 and $29 a share; it accepts the current $26 bid; or EA walks away from its bid.

Creutz concluded that Take-Two's major shareholders are going to have a "significant say in the outcome," and are likely to view any offer above $30 "as too compelling to leave on the table, given the time value of money and the ability to lock in a significant gain on a company that has had historically volatile stock and financial performance."

A group of Take-Two shareholders led by Oppenheimer Funds Inc., D.E. Shaw Valence Portfolios LLC, SAC Capital Management, Tudor Investment Corp. and ZelnickMedia Corp. joined forces last year to oust the New York-based company's board of directors and install a new management team fronted by CEO Ben Feder and chairmran Strauss Zelnick, both from ZelnickMedia.

The company's institutional shareholders are probably not pleased with recently disclosed information from Take-Two regarding a proposed change to the management agreement it has with ZelnickMedia. The amendment increases the monthly management fee $208,333 from $62,500, extends the term of the management agreement by a year and grants ZelnickMedia 780,000 shares in restricted stock if the company undergoes a change of control. At $26 a share, the stock would be worth $20 million. Because this would increase the company's share count, it could present problems for Take-Two by theoretically taking money away from current shareholders if EA does not want to increase the per share amount of its bid.

The changes would have to be approved at the company's annual shareholder meeting on April 10. -- David Shabelman