Carl Icahn now controls 3 of 8 board seats

Carl Icahn is leading a shakeup of Take-Two Interactive’s board of directors as the struggling videogame publisher, behind franchises like “Grand Theft Auto” and “BioShock,” is still trying to find its financial footing.

Nearly half of the seats on Take-Two’s board will now be controlled by Icahn, with three of the eight board members, including chief exec Ben Feder, Grover Brown and John Levy, agreeing not to stand for re-election in April, when shareholders are set to meet. Feder will remain CEO of the company.

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,” said Strauss Zelnick, the gamemaker’s executive chairman, in a statement.

To fill the positions, Icahn has nominated his son Brett, who works at the billionaire’s investment firm; Atari’s former finance director Sunghwan Cho, who also works for Icahn; and James L. Nelson, a director at Icahn Enterprises.

The new board members must ankle the board if Icahn’s shareholdings in the company fall below 5%.

Move comes after Icahn, who has been upping his stake in Lionsgate, also increased his holdings of Take-Two to 11.3% in December. It’s the latest chapter in an attempt to turn around the gamemaker after an accounting scandal opened the door for Zelnick to take over the company in 2007.

Despite hits like “GTA” and “BioShock” (a sequel of the latter bows next month, and a film version is in the works at Universal), Take-Two reported a nearly $138 million net loss in its fiscal year ended Oct. 31 because of cost overruns and launch delays. It posted a $97 million profit a year earlier.

The company’s market value now hovers around $780 million, far less than the $2 billion that rival Electronic Arts offered in 2008 to purchase Take-Two. At the time, board members rejected the buyout, remaining steadfast in their confidence that Take-Two could produce enough hits to generate a profit again. Icahn seems to agree.

I’m a firm believer in the long-term potential of the company,” Icahn said.

Future moves at the company could include the sale of Take-Two’s struggling sports division; it recently sold its Jack of All Games distribution unit for $43 million.

Advancing our stockholders’ interests is the board’s guiding principle, and it’s in that spirit that we’ve undertaken a change in board representation,” Zelnick said. “We have much to accomplish at Take-Two in the year ahead, and we welcome the new directors who each have experience in the entertainment industry and will help us achieve our objectives.”

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