A new lawsuit threatens Microsoft’s takeover

Microsoft’s planned purchase of Activision Blizzard threatens further problems. Another court case is said to address the inconsistencies, with CEO Bobby Kotick once again taking center stage.

Microsoft wants to buy Activision Blizzard for nearly $ 70 billion. However, the deal is far from sealed. After the voting shareholders of the acquisition finally agree, the critical assessment of the competition authorities is pending. And also a new cause overshadows the planned activity.

The latest legal woes come from New York City. Axios reports that the New York City employee pension system and the pension funds of the city’s teachers, police officers and firefighters are seeking a lawsuit.

As shareholders of Activision Blizzard, they are suing the publisher and targeting CEO Bobby Kotick. It is alleged that the sale to Microsoft was rushed so that Kotick could avoid liability for the company’s legal problems.

“Given Kotick’s personal responsibility and the responsibility for Activision’s dysfunctional workplace, the board should have realized that they were unable to negotiate a sale of the company,” the lawsuit says.

abuse and other misconduct

It is the latest in a series of legal actions taken in recent months, mostly related in some way to the allegedly toxic work environment. Last fall, it was reported that Bobby Kotick personally abused female employees and covered up the misconduct of other executives under his supervision. Activision Blizzard’s share price plummeted in the wake of the revelations.

It later emerged that just three days after the Wall Street Journal published a report claiming that Kotick had been aware of the sexual misconduct allegations for years, Microsoft had begun negotiations to acquire Activision Blizzard.

Other inconsistencies also seem to bother plaintiffs: “Microsoft opened acquisition talks on November 19, 2021, but the board held a meeting just two weeks later, December 1, 2021, to discuss Microsoft’s offer.” states in the complaint.

During this window, Kotick would notify the prospect that he would be willing to accept an offer of between $ 90 and $ 105 per share. Finally, in January, it was announced that Microsoft had agreed to acquire Activision Blizzard in a transaction that would cost $ 95 per share, worth $ 68.7 billion.

“The speed with which Kotick not only limited the supply, but also secured a deal,” continues the lawsuit. “The merger not only gave Kotick and his fellow board members the opportunity to evade responsibility for their blatant fiduciary duty violations, it also gave Kotick the opportunity to reap significant and incalculable gains.”

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The lawsuit also claims that the merger price appears to grossly underestimate Activision, representing only a 1% premium over the company’s stock price prior to DFEH’s July 2021 lawsuit.

Sources: VGC, wccftech, power supply, Ace

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