Sept. 3 (Bloomberg) -- Take-Two Interactive Software Inc., maker of the ``Grand Theft Auto'' video games, fell 5.6 percent in Nasdaq trading on concern that a possible acquisition by Electronic Arts Inc. may fall through.

Take-Two tumbled $1.37 to $23.07 at 4 p.m. New York time, the biggest decline since November. The shares have gained 26 percent this year.

The stock dropped because of rumors that Electronic Arts may have lost interest in New York-based Take-Two, said Douglas Creutz, an analyst at Cowen & Co. in New York. Last month, Electronic Arts let a $2 billion tender offer expire while agreeing to hear from Take-Two about the company's value.

``There was some chatter going around that the deal might be in trouble, purely rumors,'' Creutz, who rates the shares ``neutral'' and doesn't own them, said in an interview. ``There's nothing factual.''

The stock began to recover after Electronic Arts Chief Executive Officer John Riccitiello declined on a Citigroup Inc. conference call today to discuss the company's talks with Take- Two, citing a non-disclosure agreement. His reluctance may have reassured some investors because it suggested the companies are still communicating, Creutz said.

Electronic Arts' $25.74-a-share offer expired on Aug. 18. Take-Two requested the meeting after the suitor said it wouldn't extend the tender offer.

Riccitiello said on the call that Electronic Arts, the second-largest video-game publisher, is making more casual games, including titles for Nintendo Co.'s Wii and DS handheld player. The company's sales in the casual market are expected to reach $1 billion within three years, he said.

Electronic Arts, based in Redwood City, California, fell $1.36, or 2.8 percent, to $47.61 in Nasdaq trading. The shares have declined 18 percent this year.

To contact the reporters on this story: Michael White in Los Angeles at mwhite8@bloomberg.net.

Last Updated: September 3, 2008 16:09 EDT