U.S. proxy advisory firm Institutional Shareholder Services has recommended that shareholders of video game publisher Take-Two Interactive Software re-elect all eight board directors at an upcoming shareholder meeting.
The recommendation comes as Take-Two, publisher of the blockbuster 'Grand Theft Auto' game, fends off a $2 billion hostile bid from rival Electronic Arts .
Last week, Take-Two told shareholders to reject the all-cash, $26-a-share bid as too low. It said it was still open to combining with EA or any other company, but not before the April 29 release of its 'GTA 4' game.
Take-Two Chairman Strauss Zelnick earlier said EA's offer undervalues the company and is ill-timed.
The ISS note to shareholders, dated March 28, does not address the EA bid.
Take-Two does not have a staggered board and all its directors are up for re-election annually. Last week, it delayed its annual meeting in New York from April 10 to April 17.
ISS also recommended that shareholders vote for an amended stock plan, which would increase the number of shares reserved by 2 million. If approved, 1.5 million of these restricted shares would be granted to ZelnickMedia, the investment firm owned by the Take-Two chairman that took control of the board in March 2007.
ZelnickMedia entered into this amended agreement with Take-Two management after receiving the EA offer. A change of control would accelerate the vesting of the proposed awards and may increase compensation to ZelnickMedia.
Although ISS notes that this timing "appears opportunistic, particularly in light of the EA offer," it recommends that shareholders approve the grant of 1.5 million shares to ZelnickMedia.
"However, these amendments were already in discussion since December. At this time, ISS supports the increase in share request," the note said.