Activision Blizzard Shareholder Sues Over Microsoft Buyout Deal
Activision Blizzard's proxy statement was "materially deficient," lawsuit says.
An Activision Blizzard shareholder is suing the company regarding the Call of Duty publisher's proposed sale to Microsoft for $68.7 billion. Shareholder Kyle Watson filed a lawsuit in California recently, with lawyers saying the proposal is "unfair for a number of reasons," according to Polygon.
Among the claims listed in Watson's lawsuit is that Activision Blizzard's board of directors is trying to obtain "significant and immediate benefits" with the proposed sale to Microsoft instead of considering what might be in the best interest of the company overall.
The lawsuit also claims that Activision Blizzard's statement filed with the Securities and Exchange Commission on February 18 is "materially misleading and incomplete." It further claims that the Activision Blizzard board "failed to create an independent committee composed of disinterested directors to run the sales process."
The February 18 statement laid out a very specific timeline of how the deal went down and contained many revelations, including how multiple other companies tried to buy Activision Blizzard and that CEO Bobby Kotick is reportedly set to receive a "golden parachute" payout.
The statement goes on to say that Activision Blizzard's proxy statement regarding the deal is "materially deficient, deprives Plaintiff of the information necessary to make an intelligent, informed, and rational decision of whether to vote in favor of the Proposed Transaction, and tis thus in violation of the Exchange Act."
Watson wants Activision Blizzard to issue a new SEC proxy statement that doesn't have the kind of "untrue statements" that are claimed to be in the initial document.
A spokesperson for Activision Blizzard told Polygon, "We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court."
A second lawsuit, this one filed in New York, contains similar claims against Activision Blizzard. These lawsuits are separate from the ones Activision Blizzard is facing regarding its corporate culture and workplace. Activision Blizzard CEO Bobby Kotick is accused of, among other things, knowing about and covering up instances of sexual harassment. He is also said to have threatened to kill an employee.
Microsoft's deal to buy Activision Blizzard has not yet gone through. In addition to any matters related to shareholder cases, the buyout will face regulatory scrutiny, experts say, though it is ultimately expected to be approved. If that does happen, Microsoft will own Activision Blizzard and all of its studios and franchises, including Call of Duty, Overwatch, Warcraft, Diablo, and many more.
The products discussed here were independently chosen by our editors. GameSpot may get a share of the revenue if you buy anything featured on our site.
Got a news tip or want to contact us directly? Email email@example.com