Take-Two Takes Out CEO

The video-game maker's shareholders vote out Bruce Eibeler and vote in the activist group's slate.
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Shareholders of video-game publisher


(TTWO) - Get Report

voted to oust current CEO Paul Eibeler late Thursday and give control of the board of the directors to a group of hedge funds and mutual funds that had initiated activist action against the company.

The group of shareholders consisting of Oppenheimer Funds, S.A.C. Capital Management, Tudor Investment, D.E. Shaw Valence Portfolios and ZelnickMedia

had filed with the


on March 7 their intention to force out existing management at Take-Two. Collectively, the group owns about 46% of the company.

At the annual meeting held late Thursday, shareholders voted in favor of the slate of board members proposed by the activist group, rejecting the company's nominees.

The Take-Two board of directors now consists of Strauss Zelnick, Ben Feder, Jon J. Moses, Michael Dornemann, Michael James Sheresky and John Levy, who is an incumbent, independent director of Take-Two.

Grover C. Brown, another incumbent, independent director, was also elected as a director at a meeting of the new board of directors held following the stockholders meeting.

The consortium also succeeded in installing

Strauss Zelnick, founding partner of ZelnickMedia, as the new chairman of Take-Two.

Zelnick will now have the power to pick the new CEO of Take-Two, one of the main agenda items of the shareholder group.

Shares of Take-Two were down 59 cents, or 2.8%, to $20.51 in extended trading. The stock has soared nearly 20% since the news of the dissident shareholder filing.

"The new board plans to put in place strategies designed to revitalize Take-Two, focus on supporting and enhancing its creative output, improve its margins and ensure that the 2007 release pipeline meets expectations," Zelnick said in a statement.

A shareholder proposal requesting that the board of directors' compensation committee include social responsibility, as well as corporate governance and financial criteria, in setting executive compensation failed.

Take-Two had postponed its annual meeting from March 23 to Thursday in a bid to find alternatives,

including a possible sale. But the company's efforts

came up short.