Tecmo has until September 4 to accept or decline the offer, which would see Square purchase a controlling stake at a 30% premium over current stock prices. The two have apparently been discussing the possible takeover since May, with Square Enix adding that it will not continue to pursue its takeover of Tecmo if the offer is rejected.

"Tecmo is a group of excellent creators with proven track-record in the global market, which is a precious human resource of Japan," reads a statement from Square Enix. "We, however, cannot be optimistic about the future of this significant resource, given the current circumstances surrounding Tecmo."

Tecmo recently saw the resignation of president Yoshimi Yasudam, with recent lawsuits accusing the company of denying promised bonuses to famed game designer Tomonobu Itagaki and refusing to pay its staff overtime.

It marks the latest attempt at expansion from Square Enix, which was formed in the 2003 merger of acclaimed Final Fantasy creator Square and Dragon Quest developer Enix. The company then purchased Space Invaders owner Taito in 2005.