Not everyone's happy with Activision Blizzard's Vivendi split
With Activision Blizzard buying its majority stake back from media conglomerate Vivendi, a lawsuit has emerged contending that the deal was drawn up not to benefit Activision, but its board of directors.
Activision Blizzard announced two weeks ago
that it was buying back $5.83 billion in shares from majority shareholder Vivendi, with another $2.34 billion being purchased in a private sale by the investor group, which is led by Activision CEO Bobby Kotick and co-chair Brian Kelly.
In conjunction with the announcement, Kotick stated that the purchase would "represent a tremendous opportunity for Activision Blizzard and all of its shareholders" [PDF
However, shareholder Todd Miller contends otherwise. In his July 26th filing with the Los Angeles superior court, Miller contends that
"there [is] no apparent business purpose" to involving the insider investor group to participate in the reacquisition of company shares, "other than to aggrandize [the defendants] and provide billions of dollars' worth of Activision stock to the insider investor group at a discounted price."
The 11-person board of directors -- which in addition to Kotick and Kelly contains several other former Vivendi executives -- stands to "score an immediate paper windfall of $664 million," according to the lawsuit.
The suit further asks the court to rescind the purchase agreement, as well as to order Activision to implement checks against "future one-sided self-dealing."