Shareholder sues Activision Blizzard over buyback of shares from Vivendi
Shareholder Todd Miller has filed a complaint against Activision and its board of directors including CEO Bobby Kotick, over buyback of shares from Vivendi.
Activision Blizzard shareholder Todd Miller has filed a lawsuit over the company’s recent acquisition of Vivendi’s 85 percent stake in Activision.
The complaint was filed by Miller against Vivendi, Activision and its board of directors including CEO Bobby Kotick, alleges a “breach of fiduciary duties, waste of corporate assets and unjust enrichment,” the report states.
On the 26th of July, Activision authorised on a plan to buy back 439 million shares for $5.83 billion back from Vivendi. However, an investor group, led by Activision chief Bobby Kotick and Brian Kelly, bought an additional 172 million shares for $2.34 billion, which is a 10 percent discount on the price of stock closed on July 25.
“Upon closing of the deal, the insider investor group will become the company’s largest shareholder, holding approximately 172 million shares, or approximately 24.9 percent of the outstanding common stock,” reads Miller’s complaint.
Miller’s main concern was the fact that a group of insiders were able to seize so many Activision shares for 10 percent less.
“There was no apparent business purpose in allowing the insider investor group to participate in the discounted stock offering, other than to aggrandize defendants Kotick and Kelly and provide billions of dollars’ worth of Activision stock to the insider investor group at a discounted price.”
In short the complainant alleges that Activision acted in an inappropriate way on behalf of its shareholders.
Miller has requested the court to write off the buyback agreement and force Activision to create measures that would “prevent future one-side self-dealing.”
Source: VentureBeat