Square Enix announced its proposal last week to acquire a controlling stake in Tecmo. While the bid was set to expire later today, Tecmo formally rejected the offer this morning, as they believe a merge with Koei would be more fitting.

From the released statement, translated by Reuters:

Through a merger, we expect we can grow further by respecting both companies’ identities and having an environment in which employees can fully exhibit their skills.

Koei, eh? Makes sense. Tecmo is popular here in the West with titles like Ninja Gaiden and Dead or Alive, while Koei is well-known for its Dynasty Warriors series, which is a huge hit in Japan.

So a merge would give them significant market share in both countries. Given the current state of the company, it’s rather surprising that Tecmo passed up on Square’s offer indeed. More PlayStation 3 News...