Though the story of Microsoft acquiring Activision Blizzard may have left the 24-hour news cycle, it has continued to develop in the background, with new details coming out at a brisk pace. The latest development is, in fact, particularly interesting, as several Activision Blizzard shareholders are now suing the company and its board of directors.
While Microsoft is yet to chime in on the matter, two Activision Blizzard shareholders have already brought up lawsuits against the company, with the main argument being that it hadn't disclosed all details pertinent to the acquisition. Simultaneously, Activision Blizzard CEO, Bobby Kotick, is getting investigated by the Securities and Exchange Commission (SEC), and there's the planned Federal Trade Commission (FTC) review adding even more hoops for Microsoft to jump through.
According to Kyle Watson - the shareholder who filed the first lawsuit against Activision Blizzard - the company's sale plan is unfair towards shareholders and designed specifically to hide the apparent fact that the board of directors is looking to procure "significant and immediate benefits." Indeed, Bobby Kotick himself is receiving a massive payout as part of the sale, as well as the potential "golden parachute" package if he gets removed from his position before his contract is up.
Watson's lawsuit claims that the sale leads to a major conflict of interest, whereas the deal may not be in the best interest of shareholders other than the Activision Blizzard board of directors. Watson also claims that Activision Blizzard has failed to include all key information as part of its submission to SEC and that it is violating the Securities Exchange Act in doing so. Considering the fact that Microsoft is spending $68.7 Billion on Activision Blizzard, Watson is also seeking "rescissory damages" should the deal go through.
Shortly following the announcement of Watson's lawsuit, another one cropped up, filed by Shiva Stein. Stein has brought up many of the same or similar complaints to court, and it's worth pointing out that more lawsuits may be incoming in the near future, too, causing potential trouble for the acquisition. At the same time, the planned FTC review of the Activision Blizzard acquisition may well lead to its own set of problems for Microsoft.
Microsoft is not concerned about the FTC blockage, however. The company claims that its acquisition of Activision Blizzard is in perfect accordance with the relevant antitrust laws due to the fragmented nature of the gaming landscape. While Microsoft is sure to believe that it's not the head honcho, it's up to FTC to green-light the deal in the end. At this point, the future of Microsoft's biggest gaming acquisition is still uncertain.
Source: Polygon