Activision Blizzard Shareholders Reach $250 Million Settlement Over Microsoft Deal
Shareholders of Activision Blizzard have reached a $250 million settlement over allegations that former company executives and Microsoft shortchanged investors during Microsoft’s $75.4 billion acquisition of the game publisher in 2023.
The settlement details emerged in a filing made public on Friday in Delaware state court.
Shareholders Challenged Takeover Price
The shareholder group, led by Swedish pension fund Sjunde AP-Fonden, accused former Activision Blizzard executives, including chief executive Bobby Kotick, of breaching fiduciary duties by agreeing to a takeover price of $95 per share.
According to the shareholders, Kotick pushed the merger through quickly in order to retain his position and secure approximately $400 million in change-of-control benefits tied to the acquisition.
The lawsuit focused on claims that shareholders received less value than they should have during negotiations surrounding the landmark transaction.
Microsoft And Kotick Resolve Counterclaims
Microsoft and Kotick also filed counterclaims against Sjunde AP-Fonden. However, those claims will now be resolved as part of the settlement agreement.
Court filings showed that both sides denied any wrongdoing. The defendants stated they agreed to settle in order to avoid the costs and distraction associated with prolonged litigation. Meanwhile, Sjunde AP-Fonden said the settlement amount represented a fair outcome for shareholders.
The agreement still requires approval from Kathaleen McCormick, who is overseeing the case in the Delaware Court of Chancery.
Settlement Funding Structure Revealed
According to the court filing, Microsoft will fund 40% of the settlement payment. Directors’ and officers’ liability insurance will cover the remaining amount.
The payout equates to roughly 30 cents per Activision Blizzard share.
Microsoft’s acquisition of Activision Blizzard was unveiled in 2022 and became the largest deal in the history of the video game industry. The takeover significantly strengthened Microsoft’s gaming business and expanded its ability to compete with Sony Group in the global gaming market.
With inputs from Reuters