Take-Two shares up on rave reviews for GTA4

By Scott Hillis

SAN FRANCISCO (Reuters) - Criminal action video game "Grand Theft Auto 4" won near-perfect praise in early reviews on Monday, boosting the shares of publisher Take-Two Interactive Software Inc (TTWO.O) as much as 3.4 percent ahead of the game's midnight launch.

The accolades lavished on "Grand Theft Auto 4," long expected to be the best-selling game of 2008, pushed Take-Two shares as high as $27.10, more than a dollar higher than the $25.74 per share offered for the company by rival Electronic Arts Inc(ERTS.O).

It was also the highest level for the stock since February 28, when it touched $27.61 three days after Electronic Arts went public with its $2 billion hostile bid.

"'Grand Theft Auto IV' is a violent, intelligent, profane, endearing, obnoxious, sly, richly textured and thoroughly compelling work of cultural satire disguised as fun," The New York Times raved.

The glowing reviews and jump in the stock may bolster the position of Take-Two Chairman Strauss Zelnick, who has rejected EA's offer as too low and has insisted on waiting until after the game's launch before entering discussions.

"Clearly there were very high expectations for the game going in and it looks like from the early buzz that it could exceed those already very optimistic expectations," said UBS analyst Ben Schachter,

"These ratings are quite extraordinary. It's something special and helps us understand why Take-Two was so confident and adamant that they wanted to wait," Schachter said.

Many analysts have long said EA may have to raise its bid by a dollar or two per share.

"We continue to believe that $26 per share is a good price," said Arvind Bhatia, director of research at Sterne Agee. "That said, if GTA is more successful than expected, it will provide some leverage. We would not be surprised if the deal ultimately gets done a couple of bucks higher."

Take-Two and Electronic Arts were not immediately available to comment.

The Tuesday launch of "Grand Theft Auto 4" is expected to be the biggest entertainment event of the year, with first-week sales of up to $400 million.

Colin Sebastian, an analyst with Lazard Capital Markets, said EA had probably already considered the likelihood that the game would blow away expectations.

"The bigger question for Take-Two management is how they create shareholder value above and beyond EA's offer, in order to justify their reluctance to negotiate, and given the possibility that EA could walk away," Sebastian said.

Scores on gaming review aggregation site Metacritic.org show the game, in which players work for a crime syndicate in a fictionalized New York, is on track to be the highest-rated video game of all time.

Based on more than a dozen reviews so far, the version of GTA4 for Sony Corp's (6758.T) PlayStation 3 game console has scored a perfect 100 while that for Microsoft Corp's (MSFT.O) Xbox 360 has achieved a score of 99.