The board of directors at Grand Theft Auto
publisher Take-Two has agreed to nominate for election three new board members at the request of billionaire and activist investor Carl Icahn, who holds an 11.3 percent stake in the company.
The three new nominees would replace current board members Grover C. Brown, John F. Levy, and CEO Ben Feder, none of whom will go up for re-election at the company's annual stockholder meeting this year. Feder will remain CEO of the company.
Among Icahn's three nominees are Icahn Group's SungHwan Cho, James L. Nelson, and Carl Icahn's son Brett Icahn, who's also on the board of directors at American Railcar Industries and an investment analyst at Icahn Management.
Icahn agreed to vote for all of Take-Two's board nominees, which include incumbent directors Michael Dornemann, Robert Bowman, J Moses, Michael Sheresky, and Take-Two chairman Strauss Zelnick.
Icahn also agreed that if the nominees are elected to Take-Two's board, and Icahn's holdings in the company subsequently fall below five percent, his nominees will resign from the board immediately.
Zelnick, who led a management coup at Take-Two in 2007, said in a statement, "It's important to note that Mr. Icahn did not request that these directors in particular step down; they were willing to continue in their role but agreed not to stand for re-election in keeping with their commitment to the company and desire to put the best interests of stockholders first, as they have done throughout their tenure on the Board."
Icahn added, "I'm a firm believer in the long-term potential of the Company, and from a corporate governance point of view I applaud the current board for its responsiveness." He has not commented in public on what specific changes he would like Take-Two to make.
In December, Icahn boosted his stake
in Take-Two to 11.3 percent, putting his ownership at over 9 million shares valued at more than $70 million. "We believe that Mr. Icahn intends to force the company to consider a sale," said Wedbush analyst Michael Pachter at the time. Both Icahn and Zelnick are directors on Blockbuster's board.
Icahn frequently takes significant stakes in struggling companies, and then presses management to make changes that would improve its share price. He's often vocal about how he thinks his investments should be managed -- his clash with Yahoo's board was widely-publicized, and he also has a similarly tense relationship with Lionsgate Entertainment.