March 29 (Bloomberg) -- Dissident investors led by OppenheimerFunds Inc. won control of Take-Two Interactive Software Inc., the money-losing maker of ``Grand Theft Auto'' video games, and installed a new chief executive officer.

Shareholders elected all six directors nominated by investors today at a meeting at the Hotel Gansevoort in New York. Strauss Zelnick was named chairman and Benjamin Feder became acting chief executive officer.

The dissidents, including hedge funds run by Steven Cohen, David Shaw and Paul Tudor Jones, sought new leadership at Take- Two after five quarters of losses and an options-backdating scandal that led to a guilty plea by the company's former chairman. The group ousted Chief Executive Officer Paul Eibeler, who was unable to generate hits to replace ``Grand Theft Auto.''

``The first goal is to get to know the company and its employees, to reassure people and create value for shareholders,'' Zelnick said in an interview with reporters after the vote. He said the company will search for a permanent CEO.

Shares of New York-based Take-Two rose $1.36 to $22.46 in extended trading. They rose 24 cents to $21.10 at 4 p.m. in regular Nasdaq Stock Market trading and have jumped 20 percent since the dissidents announced they had joined forces on March 7.

Zelnick, who formerly headed Bertelsmann AG's BMG music company and video-game maker Crystal Dynamics Inc., said he doesn't plan to replace the Chief Financial Officer Karl Winters at this time. ``We'll be looking into the situation in the finance department,'' Zelnick said.

New Directors

From the floor today, the group nominated new directors Zelnick, Feder, Michael Dornemann, Jon Moses and Michael Sheresky. Zelnick operates New York-based investment firm Zelnick Media.

Two independent directors, John Levy and Grover Brown, joined forces with the investors. Levy also won election on the dissident slate, and Brown was added by the new board after the vote.

``If the new board and the new management team can take steps to restructure Take-Two and fix some of the issues it's faced in the past, it will be a good thing,'' said Evan Wilson, an analyst at Pacific Crest Securities in Portland, Oregon. He has a ``sector perform'' rating on the stock and doesn't own it. ``I think most investors are willing to give a new management team a shot.''

The new board's lack of experience in the video-game businesses may be cause for concern, Wilson said.

``Betting on a new management team that's inexperienced in the video-game industry is just that, it's a bet,'' Wilson said.

Targets

Feder has been a partner since 2001 at ZelnickMedia, where he oversaw the company's interests in Columbia Music Entertainment of Japan. Before that, he was chief executive officer of the telephone messaging service MessageClick Inc. and worked in movie financing at News Corp.'s Fox film studio, according to the Zelnick Media Web site.

In addition to Eibeler, the dissidents targeted three of Take-Two's directors for removal, including interim Chairman Robert Flug, Oliver Grace Jr. and Mark Lewis.

The ousted officials join more than 70 executives and directors who have left their jobs in the wake of federal or internal investigations of options backdating at more than 200 companies. Executives of at least six companies, including Take- Two, have been criminally charged.

Restatements

Take-Two restated eight years of results last month to account for $42.1 million in unreported compensation costs tied to backdated options. Former Chief Executive Officer Ryan Brant pleaded guilty to charges stemming from a probe into improper option grants and agreed to pay a $7.3 million civil settlement.

The dissident group won backing from investor advisory firms Glass Lewis & Co. and Institutional Shareholders Services Inc., who urged shareholders this month to reject independent directors Flug, Lewis and Grace, each of whom received backdated options.

Three other Take-Two directors, Todd Emmel, Michael Malone and Steven Tisch, didn't seek re-election. Emmel and Tisch were among five independent directors who received backdated grants, Take-Two said in February.

Take-Two tried to buy time when it postponed today's meeting for almost a week, saying it might seek a buyer or some other option. No potential acquirer or alternative option emerged, the company said three days ago.

Oppenheimer is Take-Two's largest shareholder with a 25 percent stake. Shaw's D.E. Shaw & Co., Tudor Jones's Tudor Investment Corp. and Cohen's SAC Capital Advisors LLC also are part of the group.

Take-Two's ``Grand Theft Auto'' games have accounted for more than $1.1 billion in retail sales in the U.S., according to Port Washington, New York-based market researcher NPD Group Inc. The company plans to release ``Grand Theft Auto IV'' in October.

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.

Last Updated: March 29, 2007 21:30 EDT