Take-Two shareholders approve incentive package

Chairman Strauss Zelnick called it a vote of confidence Take-Two's board was also re-elected by a wide margin. But a spokesman for Electronic Arts Inc., the company that launched a $2 billion tender offer to buy Take-Two more than a month ago, likened the approval to "asking your last employer to give you a million dollar raise and forcing your new employer to pay it."

That's because Take-Two only allowed shareholders of record as of Feb. 19 to vote at the meeting. That was five days before EA's offer went public, and analysts estimate that more than half of Take-Two's shares have changed hands since.

EA spokesman Jeff Brown said since it's possible that more than 50 percent of Take-Two's current shareholders were not allowed to vote, the results are "hardly a measure of confidence."

Zelnick called the criticism "disingenuous" and noted that the company extended the opportunity for shareholders to put proposals on the ballot, which they did not do. EA, he added, knows how record dates are selected for shareholder meetings and there was nothing unusual about Take-Two's Feb. 19 cutoff.

A big chunk of Take-Two's current investors are thought to be arbitrageurs, short-term shareholders looking to make a quick profit. Institutional investors like Oppenheimer Funds and FMR LLC, meanwhile, have substantially reduced their stakes in the company.

The restricted stock grants reduce the value of EA's bid to $25.74 per share from $26, according to EA and analysts, some of whom think this means shareholders are leaning toward accepting the bid at its current value. Take-Two's management, however, has repeatedly said the offer undervalues the company.

New York-based Take-Two's shares fell 24 cents to $25.85 Thursday.

EA went public with its bid Feb. 24 after Take-Two privately rebuffed it. Take-Two has since said it is open to a buyout, but it wants to wait until the day after "Grand Theft Auto IV," the latest game in the wildly popular GTA franchise, goes on sale April 29. EA wants the deal to happen soon because it wants to put its marketing muscle behind the popular game ahead of the lucrative holiday season.

Earlier Thursday, EA said it received a second request from the Federal Trade Commission regarding the buyout proposal. The world's largest video game publisher said while it believes the proposed acquisition would not be anticompetitive, the FTC has not come to a conclusion and said it needs more information and time to complete its review.