Activision shareholder sues over stock buyback

Activision Blizzard shareholder Todd Miller has filed a complaint against the company, alleging that its plan to buy back stock through an investor group disproportionately favors the group with no benefit to Activision.

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Activision Blizzard recently announced plans to break ties with Vivendi by selling its shares to an investor group. In response, shareholder Todd Miller has filed a complaint against Activision, its board of directors, and Vivendi, claiming the investor group is coming out ahead with no benefit to Activision's other shareholders.

According to Miller's claim reported by Entertainment Law Digest, the investor group, which includes Activision CEO Bobby Kotick, will get a "staggering windfall" of $600 million out of the deal. The investor group is planning to buy 172 million shares for $2.34 billion, at a price 10% lower than Activision's closing price before the day of the announcement. He accuses the companies of breach of fiduciary duties, waste of corporate assets, and unjust enrichment.

Miller's complaint boils down to the investor group getting an "immediate paper windfall" through a private sale that doesn't benefit Activision. "(T)here 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," the complaint states.

The complaint asks the court to rescind the purchase agreement, and to put controls in place to prevent similar actions in the future.

Shacknews has contacted Activision and will update as more information becomes available.

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  • reply
    August 5, 2013 7:30 AM

    Steve Watts posted a new article, Activision shareholder sues over stock buyback.

    Activision Blizzard shareholder Todd Miller has filed a complaint against the company, alleging that its plan to buy back stock through an investor group disproportionately favors the group with no benefit to Activision.

    • reply
      August 5, 2013 8:51 AM

      Dang, this really sounds like Big Business tried to do something that they figured the little guy wouldn't understand and got caught red-handed.

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        August 5, 2013 9:40 AM

        It totally is an underhanded attempt to avoid the Vivendi dividend raiding party. Shareholders who aren't party to the arrangement are getting the finger, as usual.

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      August 5, 2013 9:15 AM

      Heh, this is starting to look like Dell versus Icahn.

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      August 5, 2013 9:38 AM

      IF this is true, I hope the higher ups can't weasel their way out of any penalties.

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        August 5, 2013 10:33 AM

        Activision's entire existence since 1989 has been to make Bobby Kotick and his investors more money. He's the one that bought the company out of bankruptcy, he helped orchestrate the nerger with Vivendi, and he spearheaded the buyback of most of Vivendi's shares, using Tencent as leverage. It would take a colossal blunder for him to get implicated for anything, because he's so business-savvy, he's been able to play investors like a harp for 24 straight years.