Take-Two Interactive: Largest Shareholders Liquidate Some Holdings

Two of Take-Two Interactive Software Inc.'s (TTWO) largest shareholders are taking the money and running.

According to regulatory filings, Oppenheimer Funds Inc. and Fidelity Management & Research LLC have sold off portions of their stakes in Take-Two, maker of the popular "Grand Theft Auto" series of video games and other titles, since rival Electronic Arts Inc. (ERTS) made its $26 a share, or $1.9 billion, offer for the company public on Feb. 24. Oppenheimer has halved its holdings in New York-based Take-Two, to 11.5% from 23%, while Fidelity now owns 2.75%, compared with a previous stake of 14%.

The move by institutional investors to liquidate their holdings in Take-Two suggests they believe the company is unlikely to attract another offer or draw a higher bid from EA, said Todd Mitchell, an analyst with Kaufman Bros. Equity Research. "What it tells me is they think $26 is a good price, and they don't think EA is going to up the bid or that there is a competitive bidder out there," he said.

UBS analyst Benjamin Schachter on Tuesday wrote that the change in Oppenheimer's stake "is of particular interest, given the possibility that Electronic Arts might take its $26 share bid for Take-Two direct to shareholders" after the target rejected the bid on the same day it was made.

While Oppenheimer remains a significant shareholder in Take-Two, Schachter noted the recent sales indicate that the investor is "less likely to fight for a higher offer," raising the likelihood that EA would clinch a deal for $26 a share. - David Shabelman