page_title: Take-Two Interactive
section_title: 2007–2008: Shareholder takeover and attempted buy-out
hierarchical_section_title: Take-Two Interactive / History / 2007–2008: Shareholder takeover and attempted buy-out
caption_attribution_description: Photo of American executive Strauss Zelnick, taken in March 2015
context_page_description: Take-Two Interactive Software, Inc. is an American video game holding company based in New York City and founded by Ryan Brant in September 1993.
  The company owns two major publishing labels, Rockstar Games and 2K, which operate internal game development studios. More recently, Take-Two created the Private Division label to support publishing from independent developers, and acquired the developer Social Point to establish itself in the mobile game market. The company also owns 50% of professional esports organization NBA 2K League. Take-Two's combined portfolio includes franchises such as BioShock, Borderlands, Grand Theft Auto, NBA 2K, and Red Dead among others.
  As of March 2018, it is the third-largest publicly traded game company in the Americas and Europe after Activision Blizzard and Electronic Arts, with an estimated market cap of US$13 billion.
context_section_description: A fire had damaged part of the Take-Two headquarters building in New York in 2006. In early January 2007, Take-Two relocated the headquarters for 2K to Novato, California to 65,000 square feet of space at Hamilton Landing, an office park that had repurposed the former hangar structures from the Hamilton Army Airfield. Later that year in September, Take-Two established a partnership with Nickelodeon and launched a new label, 2K Play, designed for publishing of family-friendly titles alongside 2K's 2K Games and 2K Sports sub-labels, absorbing the remaining publishing duties of the Global Star label. In December 2007, Take-Two established 2K Marin (named after Marin County, where Novato is located) and expanded its presence at Hamilton Landing.
  Due to the various SEC investigations and the Hot Coffee controversy, investors in Take-Two discussed the possibility to taking over the company at its next board meeting in March 2007, as to oust the company's current management. There was also issues with Take-Two failing to make its revenue targets, having lost US$163.3 million in 2006. The investors, OppenheimerFunds Inc., S.A.C. Capital Management, Tudor Investment Corp., D.E. Shaw Valence Portfolios and ZelnickMedia, held 46% of the company's stock at this point, and were looking to put ZelnickMedia's Strauss Zelnick as the chairman of the board while outing long-standing management and board members. Zelnick had previously been president and CEO of BMG's North American division at the time of the sale of BMG Interactive to Take-Two, a move he had been against believing that BMG could have capitalized on the video game sector more. Following BMG, Zelnick had been COO of 20th Century Fox and CEO of Crystal Dynamics. He founded ZelnickMedia few years later in 2001 as a private equity firm to focus on media and interactive entertainment investments. Industry analyst Michael Pachter stated that a takeover would be best for Take-Two, as the present management "completely abdicated any responsibility for the oversight of the options-granting policy. A more responsible board would have committed hari-kari." The current CEO, Paul Eibeler, who had replaced Brant after his resignation, had tried to find a buyer for Take-Two after the investors filed their intent with the SEC, among which included EA, but could not negotiate a sale before the meeting. The takeover was successfully agreed to by stockholders on March 29, 2007, with Zelnick naming Ben Feder, a partner at ZelnickMedia, as the new CEO. As of July 2015, Strauss Zelnick is the largest single shareholder by voting power.
  The company announced a major restructuring in mid-2007, following the takeover. With the move of the 2K labels to Novato, the executive, management, distribution and sales areas were evaluated to align these by business discipline rather than geography. Subsequently, the company let go about 5 to 15% of its approximately 2100 employees, closed down some of its European offices and centralizing these in its Geneva location, and looked to get out of the distribution market by looking for buyers of Jack of All Games.
  In mid-February 2008, EA made a US$25-per-share all-cash transaction offer worth around US$1.9 billion to the board of Take-Two, subsequently revising it to US$26 per share after being rejected and making the offer known to the public. At the time, Take-Two's stock was valued around US$10 per share. EA CEO John Riccitiello said that EA had previous considered a deal for Take-Two in the previous year when they were approached by Eibeler, however, with Activision's acquisition of Vivendi Games in December 2007, EA was looking resecure itself as one of the top video game publishers with the acquisition of Take-Two. While Take-Two had been discussing the potential of a buyout to a large media company after the shareholder takeover, Zelnick and the board rejected the offer, with Zelnick stating "We didn't slam the door, we just said look, the price is not right and the time is wrong". Take-Two offered to discuss the offer after Grand Theft Auto IV's release
caption: Zelnick in 2015
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