An Activision Blizzard shareholder is suing the company and its board of directors over alleged Securities Exchange Act violations in its potential acquisition by Microsoft.
As reported by Polygon, the lawsuit was filed against Activision Blizzard by shareholder Kyle Watson, on Thursday in California. Watson’s lawyers said that Activision Blizzard’s plan for the sale was “unfair for a number of reasons.” According to the lawyers, one of these reasons is that the board is looking to “procure for themselves and senior management […] significant and immediate benefits.”
The lawsuit also raises the potential conflicts of interest, particularly that the deal “is not in the best interest” of Activision Blizzard, Watson, or company stakeholders. And the lawsuit also referenced the “golden parachute” that executives like CEO Bobby Kotick might receive, if he is fired. The golden parachute was reported on by Axios, essentially being a big payout for Kotick.
Watson’s lawyers also allege that Activision Blizzard’s February 18 SEC filing is “materially misleading and incomplete,” elsewhere in the filing. This would violate the Exchange Act. It also calls out missing information in the SEC filing relating to the “ad hoc committee” that ran the sales process.
Watson wants the court to order Activision Blizzard to release a new SEC preliminary proxy statement. And he wants it to include more facts, no “untrue statements,” and if it goes through, to receive “rescissory damages.”
Microsoft announced they would be acquiring Activision Blizzard last month for a landmark deal of $69 billion. The acquisition is currently under investigation by the Federal Trade Commission. So if something comes up, the deal might not go through.
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Featured Image Credit: Activision Blizzard