Billionaire financier Carl Icahn has increased his stake in Take-Two Interactive to 11.3 percent, up from 2.5 percent, according to a filing with the SEC.
Icahn, known for his shrewd business moves, has always had an interest in videogame companies, and this latest purchase has analysts specualting on the future of Take-Two and why Icahn purchased his stake at this particular time. His purchase of 5.9 million shares and more than 783,000 options makes him the company’s second largest shareholder.
Earlier this year, Take-Two spurned a $25.74-a-share acquisition offer from Electronic Arts. Now, with Icahn more involved, analysts think something is imminent with Icahn looking to cash in on undervalued shares. With the announcement of Icahn’s purchase, Take-Two shares jumped more than 9 percent on Friday to close at $9.01.
According to a Reuters story, analyst Michael Pachter, who montiors the industry for Wedbush Morgan, said that Icahn may force a sale of Take-Two:
"I don’t think as an activist he wants to run a company, I think it’s much more logical that he would sell the company," Pachter said.
Pachter also said that Icahn has a history with Take-Two chairman Strauss Zelnick, whom Icahn nominated to the board of Blockbuster in 2005.
Another scenario, according to analyst Mike Hickey of Janco Partners, is to sell off parts of the company, such as 2K Sports:
"There’s the opportunity to unlock some significant value, they could look at the pieces of the business," Hickey said.
It will be interesting to see what Icahn has planned for the company and how it impacts some of the company’s most reconizable franchises, such as Grand Theft Auto and BioShock.