Take-Two and Electronic Arts sign confidentiality agreement, but I'm still skeptical

Shares of Take-Two Interactive (NASDAQ: TTWO) are up about 3% today after the company disclosed that it has entered into a confidentiality agreement with Electronic Arts (NASDAQ: ERTS), in a sign that a deal may get done after all. Last week, Electronic Arts let its tender offer expire but said that it would listen to a confidential presentation on the company's operations.

In an 8-K filed with the SEC yesterday, Electronic Arts disclosed the confidentiality agreement and added that its terms prohibit the company from commenting publicly on the negotiations until a deal is reached or discussions are terminated.

It's hard to know what to make of this. By getting Electronic Arts to sign a confidentiality agreement, Take-Two has put an end to the tit-for-tat soap opera aspect of this takeover battle. Whether they're serious about getting a deal done remains to be seen. Given Take-Two's track record of filibustering and questionable governance, I'm skeptical. At this point, investors should be evaluating shares of Take-Two Interactive based on its prospects as a stand-alone business, not the chances of a deal that Take-Two's board has demonstrated a lack of enthusiasm about.