Take-Two shareholder unrest grows

Electronic Arts raised eyebrows two weeks ago when it offered to buy Take-Two Interactive for 64 percent more than the company's closing stock price. The Grand Theft Auto IV and BioShock publisher raised even more eyebrows when it turned down EA's advances, stating that the $1.9 billion offer on the table was too low.

Since then, everyone has been waiting to see what EA's next move will be; will the megapublisher attempt a hostile takeover, will it enter a higher bid, or will it walk away?

Yesterday, the two biggest Take-Two shareholders drastically reduced their stake in the company, as reported by Reuters. The majority shareholder, US mutual-fund company Oppenheimer Funds, halved its shares to 8.8 million, and now owns a mere 11.5 percent of Take Two, down from 23 percent. The second-largest shareholder, FMR LLC, also ditched 16 percent of its stock, which means that it now has a 14.7 percent stake.

Wedbush Morgan analyst Michael Pachter commented, "To the extent there was speculation that shareholders would band together and hold out for more money from EA, that's kind of shot down now. They are voting on this deal, and they are voting with their feet. They know they have no leverage."

In a development also reported by Reuters, a shareholder lawsuit was filed in a Delaware court that accused Take-Two of "breaches of fiduciary duty" by not discussing EA's offer, and for securing large payouts for executives if the company did get acquired.

On Friday, Take-Two also announced that executive employees would nab 1.5 times their salary as well as a bonus for up to 18 months in the event of losing their jobs due to a buyout, whereas all other employees would be paid up to the equivalent of six months' salary if they were laid off.