Grand theft company

7 March 2007 By David Vise

Steve Cohen and Paul Tudor Jones may seize control of TakeTwo, the videogame producer, without buying out minority shareholders. Given TakeTwo’s problems, investors may welcome this. But it highlights a weakness in US shareholder protections that could be exploited.

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An investor group including hedge funds SAC Capital Advisors, Tudor Investment Corp. and D.E. Shaw & Co. has acquired 46% of videogame publisher TakeTwo Interactive. In a filing with the SEC, the group, which also includes Oppenheimer Funds Inc, said it agreed on March 4 to work together to replace the company's entire board of directors at the annual meeting on March 23 with nominees of its own. The group plans to fire TakeTwo's chief executive officer, Paul Eibeler, and will evaluate whether or not to keep the firm's chief financial officer.

TakeTwo is pleased that these investors recognize the value that our employees have created and the significant opportunities ahead for us, the company said in a statement.

TakeTwo Interactive, a New Yorkbased video game publisher, has enjoyed success with its Grand Theft Auto series. The company's stock price recently dropped after it reported disappointing fourth quarter financial results, and a cloudy outlook for 2007. TakeTwo Interactive also has been dogged by questions about the accuracy of its financial statements, prompting two different heads of its audit committee to resign.

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