"Grand Theft Auto" publisher Take-Two Interactive Software fired off a rejection Monday to an extended hostile two-billion-dollar takeover bid from Electronic Arts, calling it "inadequate."
The Take-Two board of directors said its advice to shareholders to refuse EA's takeover offer remains unchanged, shortly after the Redwood City, California-based company announced it was extending its bid by one month.
EA said it was extending its deadline to June 16 at 11:59 pm EST (0359 GMT Tuesday), after it expired Friday.
EA said the terms of its offer remain unchanged at 25.74 dollars a share, and it has acquired only eight percent of Take-Two's shares.
"This is the same highly conditional proposal that EA offered Take-Two stockholders on March 13, 2008, which our board of directors thoroughly reviewed and unanimously determined to be inadequate and contrary to the best interests of Take-Two's stockholders," Take-Two board chairman Strauss Zelnick said.
"As such, the recommendation of our board of directors that stockholders not tender their shares to EA remains unchanged," the chairman said.
Zelnick said the board is committed to maximizing stockholder value and is "exploring all strategic alternatives" to do so.
Take-Two chief executive Ben Feder noted that the small number of shares tendered into EA's offer to date "demonstrates that our stockholders agree with what our board has maintained from the beginning: EA's proposal undervalues our company."
Take-Two shares slid 1.18 percent to 26.78 dollars in early trade in New York, while EA was off 0.42 percent at 49.39.
EA took its two-billion-dollar offer, made in February, directly to Take-Two shareholders after it was rejected by the board.
Take-Two's board had refused to discuss a takeover with EA prior to the April 29 launch of "Grand Theft Auto IV: Liberty City Stories," which tallied a record-breaking 500 million dollars in sales in its first week.
The "GTA" franchise is as controversial as it is popular because of its violence. Players score points with acts such as carjacking and killing prostitutes or police officers.
Analysts credit "GTA: IV" with causing US video game software sales to surge to 1.23 billion dollars in April as compared to 839 million dollars during the same month a year earlier.
While EA maintains it factored the predictable success of "GTA: IV" into its offer, analysts believe the game's superstar performance puts pressure on the world's largest video game maker to up the ante.
Take-Two might have additional leverage due to a freshly announced deal with Universal Pictures to have its "BioShock" video game made into a movie directed by Gore Verbinski, who directed the "Pirates of the Caribbean" trilogy.
