Proxy fight in works at Take-Two

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NEW YORK -- Shares of video game publisher Take-Two Interactive Software Inc. jumped 7.6% on Wednesday after institutional investors controlling 46% of the company said they have come together to take control of its board, elect media veteran Strauss Zelnick as nonexecutive chairman and potentially oust CEO Paul Eibeler.

The group of dissident shareholders, which includes OppenheimerFunds Inc., SAC Capital Management, Tudor Investment Corp., D.E. Shaw Valence Portfolios and ZelnickMedia Corp., made its plans for a proxy fight known in a filing with the U.S. Securities and Exchange Commission. Take-Two's annual shareholder meeting is set for March 23.

If the dissidents have their way, Zelnick, former CEO of BMG Entertainment, would become Take-Two's nonexecutive chairman and seek the power to replace Eibeler. The group also wants a review of the status of CFO Karl Winters.

The group is nominating six directors for Take-Two's board, including potentially one of the company's current independent directors. It said it will vote to reduce the size of the board from nine members to six, so that its nominees would constitute the entire board.

Take-Two has been suffering from accounting issues and problems with stock-option grants, which have overshadowed the huge success of its controversial game franchise "Grand Theft Auto."

In one of the most recent developments, former CEO Ryan Brant pleaded guilty last month to criminal charges related to the backdating of options and settled a civil action brought by the SEC in a $7.3 million deal.

The company's stock closed at $18.95 on Wednesday after going as high as $20.88 in intraday trading. It has traded between $9.06-$21.06 during the past 52 weeks.
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