Id Software turned down Activision takeover bid

Once again, a nasty legal battle has pulled back the curtain of secrecy that shrouds major game-industry deals. In this case, the deal didn't go through--but if it had, it could have been one of the most talked about of 2004.

Today's edition of the Wall Street Journal ran an article based on recent court documents filed by Adrian Carmack against the company he partly owns, id Software. According to the financial daily, Carmack--who is not related to id technical director John Carmack--is claiming that he was forced to resign his position as a director of and artist at the studio earlier this year. Previously, it was only known that he had "retired," presumably voluntarily.

However, it appears Carmack's parting with id was anything but amicable. According to the Journal, the onetime Doom 3 designer, who owns 41 percent of id, was "fired" by the other four co-owners after refusing a buyout offer of $20 million. Under the terms of a contract he is now seeking to have declared void, Carmack will have to sell his shares back to id for $11 million.

While Carmack won't exactly be lining up for food stamps if he receives the $11 million, it is a mere fraction of what he could receive if id Software is ever bought. And, as revealed in the documents, it was nearly bought last year, when Activision contemplated a $105 million takeover bid of the Texas-based developer.

According to the Journal, the buyout was one of several multimillion dollar offers Activision made id. Another would have seen the publisher pay $90 million for the rights to the best-selling Doom, Quake, and Castle Wolfenstein franchises, which it already publishes. The id-developed Doom 3 was released last year for the PC and this summer for the Xbox. Quake 4, in development at Raven Software under id's supervision, is set to ship this holiday season for the PC and Xbox 360.

The Journal reports that it is Carmack's contention that the other id owners deliberately rejected all of Activision's offers so they could then fire him, thereby acquiring his shares for a fraction of what the publisher would have paid for them. He claims that his fellow co-owners, which control a combined 59 percent of id, began a death-of-a-1,000-cuts-style approach to force him out--closely monitoring his hours, stripping him of privileges, and denying him access to board-related documents. The other board members also ceased redistributing profits as dividends in 2004 (for the five years prior to that, Carmack had received approximately $3.5 million per year).

GameSpot's attempts to contact id representatives had been unsuccessful as of press time, and inquiries sent to Activision were redirected to id's external public relations agency.