Take-Two's options run thin
Grand Theft Auto publisher says it's unlikely to present any alternative course other than a sale to avoid shareholder group from taking over.
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After a series of high-profile setbacks for Take-Two Interactive, including the infamous Hot Coffee mod for Grand Theft Auto: San Andreas, a stock-options scandal, and criminal charges brought against its former CEO and founder, a group of the publisher's shareholders announced earlier this month its intention to replace the current CEO and board of directors. That move appears to be imminent, as yesterday the publisher announced it doesn't expect to propose any alternative courses of action to the shareholder group's plans.
The proposed plan involves reducing the board of directors from nine to six and appointing new members of the shareholder group's choosing. The group collectively owns 46 percent of the company's stock, and its proposals are set to be voted on at the publisher's annual shareholder meeting, originally scheduled for March 23.
Take-Two initially responded to the group's proposal by postponing the annual meeting to March 29 to "provide additional time to review the proposed actions of a shareholder group and also to evaluate alternative courses of action," one of which included selling the company. Despite the success of the Grand Theft Auto series, industry analysts downplayed the possibility of a sale, noting that any interested purchaser could have acquired the company for far less last summer, when the stock was trading at half its current levels.
Today Take-Two told investors not to hold their breath on a sale. "The Board of Directors now believes that it is unlikely to present alternative courses of action prior to the annual meeting on March 29th," the publisher announced. "The company is continuing to have discussions with representatives of the shareholder group."
[CORRECTION: GameSpot originally reported that Take-Two found it had no alternatives but to sell the company. We regret the error.]