Perhaps the third time is the charm for Electronic Arts. After its offer expired Friday, the video game publisher extended for another month its $2 billion tender offer to Take-Two Interactive’s shareholders.

Many industry watchers say that EA (ERTS) and Take-Two (TTWO) are working on a friendly deal behind the scenes. Take-Two, the publisher of Grand Theft Auto IV, admitted Monday that it is in “formal discussions” with interested buyers. Analysts expect that EA is likely among the suitors.

“Of course they’re talking. They have to be talking because it’s the right thing to do,” said Wedbush Morgan analyst Michael Pachter before EA’s tender offer expired last Friday.

EA says it extended its offer to give the Federal Trade Commission more time to review the regulatory issues of the merger. EA’s senior vice president of corporate development Owen Mahoney said in a statement that the company has a right to “terminate the offer,” but so far it hasn’t despite the multiple extensions and lukewarm support it’s gotten from Take-Two’s shareholders.

Many analysts have called for EA to raise its bid, but EA maintains its tender offer of $25.74 per share.  6.2 million Take-Two shares, roughly 8%, have been tendered as of last Friday. Take-Two’s shares, however, have been trading slightly higher than EA’s offer since GTA IV was released on April 29, which means selling on the open market would be more profitable for shareholders. Take-Two’s shares opened at $26.79 on Monday after EA announced its month-long extension.

Take-Two rejected EA’s bid because it thinks the Grand Theft Auto franchise and games like BioShock, a sci-fi shooter that Universal Pictures will make into a movie, are worth more. “EA’s highly conditional offer fails to compensate our stockholders for our exceptional portfolio of intellectual property,” said Take-Two CEO Ben Feder in a statement. “The small number of shares tendered into EA’s offer to date demonstrates that our stockholders agree with what our Board has maintained from the beginning: EA’s proposal undervalues our Company.”