Take-Two Interactive Software announced on Tuesday that it had bought back the stake held by Carl C. Icahn, compelling the resignations of three board members he was allowed to appoint.
Take-Two, the video game publisher behind the Grand Theft Auto series, agreed to purchase 12.02 million shares from Mr. Icahn at $16.93 each, the closing price on Monday, for a total of $203.5 million. According to Mr. Icahn’s purchase covenants, the three board members designated by Mr. Icahn – Brett Icahn, Mr. Icahn’s son; Jim Nelson; and SungHwan Cho – stepped down on Tuesday. The board now has five members.
Mr. Icahn, the activist investor who has rattled the boards of companies including Lions Gate Entertainment and Apple, disclosed a stake of more than more than 11 percent in Take-Two in 2009. That investment led to speculation that Mr. Icahn might push for a sale of the company.
“I think the logical jump is that there’s not an M.&A. transaction in Take-Two’s future,” Todd Mitchell, an analyst with Brean Capital, said of the development. “I think that when investors saw Icahn get involved, they thought he would do something that would actually lead to the sale of the company, and I don’t think that’s the case.”
Take-Two bought out Mr. Icahn’s stake as part of its continuing share repurchase program, according to a company statement on Tuesday. The company has already repurchased 4.2 million shares of stock as part of a 7.5 million share buyback plan.
“This share repurchase reflects our confidence in the company’s outlook for record results in fiscal 2014 and continued non-GAAP profitability every year for the foreseeable future,” Strauss Zelnick, the chairman and chief executive of Take-Two, said in the statement.
A spokesman for Take-Two declined to comment beyond the news release.
Mr. Icahn paid slightly less than $8 on average for his original purchase of 9.15 million shares in 2009. His stake peaked in 2010 at 11.58 million shares, but he sold some of that down in subsequent months. Mr. Icahn made his last big purchase of Take-Two stock at the end of last year, buying 4.4 million shares for about $11 each. On those shares, he would have made about $26 million from Tuesday’s sale.
Mr. Icahn did not return a call seeking comment.
LionTree Advisors and Willkie Farr & Gallagher advised Take-Two.