Microsoft and Activision attacked for “rigged” takeover by a Swedish pension fund | Xbox One

Microsoft’s plan to buy Activision Blizzard King did not go unnoticed and after Sony’s arguments against the merger plan, a Swedish public pension fund filed a lawsuit against Activision Blizzard and Microsoft claiming that the proposed $69 billion merger was rigged and exploited Activision’s sexual harassment crisis, in addition to protecting its CEO.

A complaint launched in Delaware against the takeover by Microsoft

The information from Bloomberg reports a 205-page complaint that also targets Activision boss Bobby Kotick and current and former members of its board of directors.

She accuses them of hammering out an undervalued deal in exchange for terms that allow Bobby Kotick to remain at the helm of the company, at least until the deal closes, after lengthy consideration. regulatory.

Microsoft knowingly exploited the harassment scandal and its commercial leverage over Activision precisely to offer Kotick a way to save his own skin. She conspired with Kotick and the board to help them escape the personal and professional consequences of this scandal.

To defend himself, a spokesperson for Activision, Joe Christinat, judges that it is nevertheless an “excellent deal for shareholders” with 98% of the votes cast in favor of the takeover. “The board went through a thorough process to decide the right decision for employees, shareholders and players” he added.

For its part, Microsoft told Bloomberg that its “Activision Blizzard’s proposed acquisition was negotiated in a legal and fair manner. »

The complaint was not filed in Delaware by chance since it is a tax haven in which Activision and Microsoft are established, and which therefore has the competent jurisdictions in the matter.

Microsoft accused of protecting Bobby Kotick

According to the document seen by Bloomberg, parts of which have been kept confidential, the deal was brokered by Activision CEO Bobby Kotick who was looking for a way to avoid liability for the years he spent presiding over a toxic culture. of “brotherhood house” at Activision. Just a year ago, journalist Jason Schreier claimed that Bobby Kotick was still in place thanks to his friends placed on the Board of Directors of Activision.

The lawsuit alleges a “hastily negotiated” transaction that would help Kotick avoid accountability in several crucial ways: potentially allowing him to stay in the job, bolstering his compensation protections, ending to shareholders’ derivative actions and paying him $400 million.

The document recalls that Microsoft admitted to having carried out due diligence on the operation, which means that the company had “full knowledge of the scandal that the merger would help to conceal”. The complaint also indicates that certain essential details of the operation were not presented to the board before the vote which was to decide the place of Bobby Kotick at Activision. This would then be a violation of Delaware corporate laws, which is why the complaint was filed.

The suit was originally filed under seal on Nov. 3 by Sjunde AP-Fonden — trading as “AP7” — a Swedish government-owned private equity asset manager that owns Activision shares.

It makes direct reference to Section 251 of the Delaware General Corporations Act, and specifically to Subchapter IX relating to

mergers and consolidations. The Swedish pension fund is seeking an injunction and damages.

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