A new lawsuit against Activision Blizzard suggests CEO Bobby Kotick and board chairman Brian Kelly aren't doing right by shareholders.
A new lawsuit from an Activision Blizzard shareholder is looking to block part of the deal allowing the publisher to spin off from parent company Vivendi, asserting that the company is acting against shareholders' interests, without their consent. Revealed by a recent SEC filing, Shareholder Douglas M. Hayes is the second investor to take legal action against the publisher since the plan was announced this July.
If the $8.2 billion deal goes through, Activision Blizzard will buy aproximately 429 million shares from Vivendi for $5.83 billion. At the same time, Activision Blizzard CEO Bobby Kotick and board co-chairman Brian Kelly will also purchase a combined 172 million shares for $2.34 billion in cash.
Hayes' lawsuit asserts that Kotick and Kelly, acting as private investors, "usurped a corporate opportunity from the company" by purchasing the stock for themselves. The suit also targets Vivendi and Activision Blizzard's board of directors for approving the allegedly illegal sale. The lawsuit is seeking an injunction against Kotick/Kelly transaction, a rescission of the contract for the sale, and an order forcing the two to report how much they have "allegedly been unjustly enriched."