Call to snub Grand Theft Auto bid

Pre-orders of Grand Theft Auto IV have been better-than-expected

Grand Theft Auto publisher Take-Two Interactive Software has urged its shareholders to reject a $2bn (£1bn) takeover offer from a rival firm.

It said that the hostile $26-a-share proposal from firm Electronic Arts (EA) was too low, but added that it had begun to explore other options.

EA went directly to shareholders after Take-Two rejected its offer last month.

Take-Two said the offer failed to take into account the predicted success of the upcoming Grand Theft Auto IV.

"Our stockholders' interests would hardly be served by accepting an offer from EA at the wrong price and the wrong time," said the firm's chairman, Strauss Zelnick.

Take-Two said it had seen indications of interest from elsewhere, but added that it had not held any serious talks.

New game

John Riccitiello, chief executive of EA, has previously told the BBC that the offer is not hostile and that the firm is offering a premium of more than 60% of what the shares were trading at before the offer.

Analysts expect that the deal will eventually go through - but that EA may first have to increase its offer.

The deal would be the latest round of consolidation in the industry, following Activision's $18bn acquisition of the gaming unit of France's Vivendi, which was announced in November.

Earlier this month, Take-Two raised its profit forecasts for the year on the basis of better-than-expected orders for its new game.

The Grand Theft Auto games have been extremely successful but have been criticised for their violent content.