Lawsuit claims 'unjust enrichment' over sale of 172 million shares to Kotick's investor group
A shareholder has filed suit against Activision, its board of directors, and Vivendi, claiming “breach of fiduciary duties”, waste of corporate assets, and unjust enrichment.
As previously reported by Develop, Activision bought its independence from 61 percent shareholder Vivendi for $8 billion, leaving the French media conglomerate with just 12 percent interest in the company.
The deal gave Activision 439 million shares for $13.60 apiece, and another 172 million shares to Activision CEO Bobby Kotick's investor group for the same price, which the complaint points out was ten percent below asking price on the day the bargain was announced.
The lawsuit claims that this second purchase of shares at the discounted rate does nothing but put about $664 million in the pockets of company insiders.
"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 the complaint as reported by Courthouse News.
The plaintiff, Todd Miller, asks that the court halt the sale and order Activision to put measures in place to “prevent future one-sided self-dealing.”
"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,” claims the filing.