In a talk with Japanese reporters, Square Enix President Yoichi Wada confirmed that his company will be seeking further acquisitions around the world. 

"We are talking with quite a few companies in and outside of Japan. We are routinely in such talks," Wada said, without divulging any details regarding prospective mergers or who Square Enix has its eye on.

Square Enix has also formally withdrawn its offer for a friendly takeover of Tecmo, following a rather hasty rejection and news that Tecmo would be seeking a merger with Koei instead.  Wada hinted that the company may have been interested in negotiating terms of the takeover and making minor revisions, but Tecmo's demands have made such talks impossible for Square Enix.

There isn't a definite "no" in any of this, but Wada is unsure if they will be attempting to reapproach Tecmo a second time even if the smaller company changes its tone. 

A merger between Tecmo and Koei would still produce a company less than a third the size of Square Enix -- reminiscent of the ongoing talks (or "headbutting," as I prefer to call it) between Electronic Arts and Take-Two Interactive.