According to this Kotaku piece, Tecmo has formally rejected Square Enix's offer to buy the firm, essentially saying it can still grow without selling.
"In our company's source of revenue, as a result of a guarantee with our capable workers, a guarantee of steady game development and the preservation of our brand, there is a high possibility of improvement... Thus, our Managing Board declines the offer," said Tecmo in a statement.
Tecmo has now released a statement saying it is in serious talks to merge with Koei. Again, from Kotaku:
As the game industry environment changes with high-powered hardware, portable game machines and rapid growth as well as online mobile games, the accelerating consumer needs are varied and sophisticated. The industry has intensified. Multi-platform and the importance of overseas markets is pushing the industry towards global competition.
Under these circumstances, these two companies have excellent financial positions, strengths and the ability to take advantage of each other in order to improve profitability and solidified the foundation of a worldwide leader.
More through the links.