Grand Theft Auto publisher Take-Two Interactive Software rejected Electronic Arts offer to extend its hostile $2 billion takeover on Monday, saying that it was inadequate.

Redwood-city based video game publisher Electronic Arts has for a third time extended the deadline for its $2 billion hostile offer to buy smaller rival Take-Two Interactive Software by one month.

The Take-Two board of directors and shareholders continued to refuse EA's takeover offer.

EA, whose unsolicited bid for the publisher of last month's blockbuster Grand Theft Auto IV video game expired at 11:59 p.m. on Friday, said the offer would expire on June 16, extended from the previous deadline of May 16.

Take-Two management and some of the company's shareholders say the company deserves a higher offer.

This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our board of directors thoroughly reviewed and unanimously determined to be inadequate and contrary to the best interests of Take-Two's stockholders, Take-Two board chairman Strauss Zelnick said.

As such, the recommendation of our board of directors that stockholders not tender their shares to EA remains unchanged, he said.

Shares of Take-Two were recently down 0.9 percent at $26.87, and shares of Electronic Arts fell 2.7 percent to $48.25.