Investors seek to shake up Take-Two

Investors who own 46% of Take-Two Interactive Software Inc. unveiled plans Wednesday to take over its board and oust the chief executive, sending shares of the “Grand Theft Auto” video game maker up by as much as 19%.

Take-Two management has been under fire for years for a number of issues, including overstating revenue and problems with stock option grants. The company regularly failed to make financial targets and spawned a national controversy over undisclosed sexual content in one of its hit games.

The shareholder group, which includes OppenheimerFunds Inc., S.A.C. Capital Management, Tudor Investment Corp., D.E. Shaw Valence Portfolios and ZelnickMedia Corp., is seeking control of the board, according to a regulatory filing.

“Replacing the board is a good thing. I think it’s very healthy to flush everybody,” Wedbush Morgan analyst Michael Pachter said. “They completely abdicated any responsibility for the oversight of the options-granting policy,” he said.

Strauss Zelnick, a former CEO of BMG Entertainment, would be nonexecutive chairman and seek the power to replace CEO Paul Eibeler and review the employment status of Chief Financial Officer Karl Winters, according to the filing with the Securities and Exchange Commission.

A Take-Two spokesman said the New York company was “pleased that investors recognize the value” in Take-Two, but did not comment specifically on the group’s plans.

Shares of Take-Two finished the day up $1.34, or 7.6%, at $18.95.