The announcement had the effect of a bomb in the video game universe. On January 18, Microsoft, via a blog post, indicated that it had reached an agreement to acquire Activision Blizzard. The amount of the transaction (68.7 billion dollars) had made the rounds of all the media. The operation has not yet been fully validated. However, she did not fail to raise concerns and questions.
After the antitrust regulators who hesitate to validate the operation, it is the turn of the people directly concerned to express reservations. Indeed, an Activision Blizzard shareholder has just filed a lawsuit against the company over the acquisition of Microsoft. This evokes a conflict of interest.
An operation that only benefits the board of directors
The shareholder in question bears the name of Kyle Watson. He filed a lawsuit on February 24 against the board of directors of Activision Blizzard, which he accuses of conflicts of interest. He said he was seeking to safeguard the interests of the company’s shareholders who would be threatened by the sale agreement with Microsoft.
For the plaintiff, the plan proposed by Microsoft and validated by Activision Blizzard would violate the Securities Exchange Act. According to Mr. Watson’s lawyer, the document filed with the SEC on February 18 by the video game company would be incomplete and misleading. He believes that details about the committee that piloted the process of selling Blizzard Activision are missing.
In his indictment, the shareholder did not stop there. He also raised issues of conflict of interest. He finds that the agreement between the company and Microsoft did not benefit Activision Blizzard shareholders. On the contrary, it would only be suitable for the board of directors of the company and the executives of the company.
This presents a real conflict of interest problem. The dissatisfied shareholder did not fail to underline the beautiful golden parachute reserved, in the event of dismissal, for the current CEO of the company, Bobby Kotick.
Activision Blizzard calm in the face of accusations from its shareholder
Mr. Watson with his lawsuit hopes for two things. As a first step, he would like the company to issue another preliminary statement to the SEC. A statement that this time would be more detailed and would not include any misleading claims. Secondly, the plaintiff wishes to benefit as a shareholder from damages in the event of validation of the transaction.
Activision Blizzard did not hesitate to react to the legal proceedings it will soon face. In a statement made to Polygon, the company said it did not identify with its shareholder’s accusations. She also added that she was eager to demonstrate her innocence in court with her own arguments.
Moreover, it should be remembered that this is not the only procedure that the company headed by Bobby Kotick must manage. This is already the subject of an investigation by the SEC. Its acquisition by Microsoft will very soon be examined by the FTC, which may well launch legal action to oppose it.
Finally, the company is also being sued by a group of Activision Blizzard shareholders for different reasons than Mr. Watson. They believe the company’s executives were negligent in handling accusations of sexual harassment and discrimination.
Source: Gaming Bolt