After several years of legal battle, Microsoft is set to pay a $250 million settlement to Activision-Blizzard shareholders who accused former executives at the company of rushing the acquisition and setting a lower price per share.
That is according to Reuters, which reports that former Activision-Blizzard shareholders, led by Swedish pension fund Sjunde AP-Fonden, agreed to settle for $250 million with Microsoft following several years of legal battle. The accusations arose from Microsoft’s deal to acquire Activision-Blizzard for $75.4 billion in 2023 at $95 per share, in which the shareholders believe they were shortchanged by Acti-Blizz executives and Microsoft. The settlement payout amounts to only $0.30 per share in addition to the $95 each shareholder previously received in the merger.
The shareholders specifically accused former chief executive Bobby Kotick of rushing to merge the company with Microsoft to “keep his job and $400 million of change-of-control benefits.” Both Microsoft and Kotick filed counterclaims against the shareholders and Sjunde AP-Fonden, which will also reportedly be resolved by this settlement.
Microsoft’s settlement with Sjunde AP-Fonden outlines the settlement amounts to only $0.30 per share on top of the $95.00 per share in cash that shareholders received in the merger, and that Sjunde AP-Fonden’s shares were voted in favor of the Microsoft transaction.
The settlement reads as follows:
“Plaintiff acknowledges that, based on the materials provided to date, there is compelling information which undermines any claim that the Board or Mr. Kotick failed to operate in good faith with respect to the matters alleged in the Action.
Plaintiff acknowledges that, pursuant to its agreement with Institutional Shareholder Services (“ISS”), ISS retained proxy voting authority and voted Plaintiff’s Activision shares in favor of the Merger at the April 28, 2022 special meeting pursuant to its proxy voting policy. In its recommendation that stockholders approve the transaction, ISS made clear that ‘the merger consideration delivers a premium, appears fair from a valuation standpoint, and provides liquidity and certainty of value for stockholders.’ ISS’s recommendation also made clear that the transaction delivered stockholders “merger consideration represent[ing] a premium of 45.3 percent over the price on the day prior to the announcement, and a premium of 51.6 percent over the stock price two months prior to the announcement.”
The merge between Activision-Blizzard and Microsoft took years to pull through after severe issues with regulators domestically and abroad. The FTC sued to block the merger on anti-trust grounds, while the UK’s Competition and Markets Authority did due to concerns over cloud gaming, leading Microsoft to sell off Activision-Blizzard’s cloud rights to Ubisoft to get the green light.
It remains a controversial topic in gaming, as it is the biggest merger in gaming history, though still far removed from the greatest mergers globally.
Update at 7:50pm CT on May 26: We have amended the article to include additional facts and quotes from the settlement.
