Activision Blizzard Inc. has agreed to a $275 million settlement which will end consolidated shareholder derivative and class action litigation. Investors had alleged a tainted $8.2 billion deal to buy back Vivendi SA’s controlling stake. The settlement will resolve allegations that Activision CEO Bobby Kotick and Chairman Brian Kelly put their own interests over those of other shareholders when an investment vehicle they control bought more than $2 billion worth of stock concurrent with the California video game giant’s $5.8 billion equity buyback from its former majority stakeholder.
Under the terms of the settlement, certain defendants and insurers will pay $275 million to the company and will be responsible for the Plaintiffs’ attorneys’ fees. Kotick and Kelly also agreed to expand Activision’s board of directors with two added independent spots and reduce their voting power from 24.9 percent to 19.9 percent. The settlement is subject to approval by the Delaware Chancery Court. Under the Vivendi deal, Activision bought back $5.8 million worth of shares at $13.60 each from the French conglomerate, while Kotick’s and Kelly’s group acquired $2.3 billion worth of the remaining shares and gained $664 million. The investors claimed that the deal doesn’t provide any real benefit to Activision or its shareholders. The $664 million gain comes from the difference between Activision stock’s $13.60 share price in the deal and the $17.46 share price the company skyrocketed to after it announced the transaction.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.