Icahn says Take-Two 'undervalued', ups stake

Billionaire investor Carl Icahn upped his stake in Take-Two Interactive Software Inc to 11 per cent and may seek talks with the company, which publishes the ''Grand Theft Auto'' video games.

The 73-year old investor and associated companies, now hold 9.16 million shares, including options, of New York-based Take-Two, according to a regulatory filing yesterday.

According to the investor, the company is undervalued and he may increase his stake in it. The company had last year rejected a $25.74-a-share takeover offer by Electronic Arts Inc.

Icahn held a 2.5-per cent stake as of 7 December when he started adding to it following the company declaring a wider-than-expected fourth-quarter loss. The report triggered the company's biggest fall ever in Nasdaq trading, a drop of 29 per cent as on 3 December.

In previous years Icahn has reported holding smaller stakes in Take-Two, in addition to his holdings in other companies like Lions Gate Entertainment and Yahoo Inc. According to Thursday's filing, his 11.3 per cent Take-Two stake comprises nearly 9.16 million shares that include 783,479 call options for which he paid about $70.6 million.

The announcement of the company's results as well as weak quarterly and full-year sales outlooks had triggered a drop during after-hours, but the stock rallied 25 cents or 3 per cent to $8.50 on news of Icahn's investment.