Japanese game publisher Tecmo has rejected a takeover bid from Japanese powerhouse Square-Enix and is instead looking at a possible merger with Koei, according to Reuters. Tecmo rejected Square-Enix’s bid on the grounds that it could still grow as a company with a merger instead.

In a joint statement, Tecmo and Koei said:

"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."

Tecmo’s share price jumped on this news by 7.5%, same as it did last week with the news of a possible takeover by Square-Enix. This news can only come as welcome due to falling share prices following the resignation of company president Yoshimi Yasuda over Tomonobu Itagaki’s lawsuit against the company.

New Tecmo President Yasuharu Kakihara said the company would not accept another bid from Square-Enix, and Square-Enix themselves stated that it was a friendly bid and that they would not attempt a hostile takeover if the bid was rejected.