Like two ships passing in the night, Electronic Arts and Take Two have honked their horns, flipped each other off and are now sailing quietly away and apart, under the moon’s glow.

EA issued a press release today announcing the end of negotiations to acquire fellow publisher Take-Two, saying that while it continues to have “high regard for Take-Two’s creative teams and products,” it has decided to terminate discussions of a buyout. The decision came despite efforts by Take Two to broker a more friendly deal between the companies, after months of resisting a hostile takeover attempt.

On the Take Two side, Chairman Strauss Zelnick responded by affirming the stockholders’ decision to reject EA’s hostile bid, adding that his management team remains “actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives.”

It may be overstating things to say that a “formal process to consider strategic alternatives” is managementspeak for “Oh, God, please help us,” but Take Two shareholders could very easily end up wishing they hadn’t played quite so hard-to-get with EA. EA offered roughly $26 per share in its initial takeover attempt but Take Two management rejected the price as inadequate, based largely on the belief that the company’s value would continue to rise leading up to, and following, the release of Grand Theft Auto IV in April. But while Take Two stocks did surge briefly in the wake of that launch, share prices began a slow but steady decline in June, falling well below the EA price point. Making things worse, after closing at $21.89 on Friday, the price plummeted almost 25 percent on the news of the EA deal falling through, and at this moment sits around $16.50.

So while the legions of EA haters and GTA fans may hail the day as a triumph, the reality may turn out to be very different. Take Two is now in a far more precarious position, and the future of the men currently at the helm, Zelnick and President Ben Feder, may depend largely on what they’re able to do in the fallout of this falling-out. Take Two has an impressive stable of games but nothing anywhere near the scale of Grand Theft Auto is on the horizon, leaving the prospects for regaining share value a bit on the bleak side – unless a deal with a different company can be engineered. But with Take Two’s current share price around 35 percent lower than EA’s offer, and EA no longer interested, making that deal without looking like they blew an opportunity seven months ago is going to be a very tough play.

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