The best laid schemes of gaming companies often go awry, and so Bobby Kotick's plan to make Activision Blizzard independent again is in trouble as the company's own shareholders are suing Bobby and company (so to speak).
Todd Miller is filing suit against Activision Blizzard, their board of directors, and parent company Vivendi, under allegations of breach of fiduciary duties, waste of corporate assets and unjust enrichment.
As a brief recap, Kotick succesfully negotiated a deal for Activision Blizzard to buy back 439 million shares from Vivendi for a total $ 58.83 billion. A separate investment group which includes Kotick is buying remaining 172 million shares for $ 2.34 billion.
Miller's suit alleges that even though the deal will make the company 100 % independent, it does not benefit Activision Blizzard in any way. Furthermore, Miller is suspicious of the sweetheart deal given to the investment group, which will make it the single largest shareholder in the company.
There are conflicts of interest in the deal, as many of Activision Blizzard's 11 shareholders are set to retire when this deal is consummated. As former Vivendi executives as well, they are unlikely to turn down their former company's offer. Overall, the investment group stands to profit by $ 664 million. Miller wants the courts to stop the purchase and to limit Activision from arranging for similar one-sided deals.
To be fair, we don't really know of any instances of Vivendi intruding in how Activision Blizzard (or its other companies for that matter) does its business. On the other hand, there's something about being as independent as Valve that allows you to take risks and try things you wouldn't be able to otherwise.
Was the purchase deal a genuine attempt to spin off from Vivendi or a cash grab by Kotick and his colleagues? The courts will be deciding soon.
Image is from Diablo III
Source: Courthouse News Service
