Activision Shareholders Reach $250 Million Settlement Over Microsoft Buyout

After a late filing held on Thursday, which has taken place at a court in a Delaware state court, Activision Blizzard shareholders struck a $250 million settlement over claims that Microsoft and the company’s senior leadership devalued them when Microsoft bought the game developer for $75.4 billion in 2023.

Investors in the company that created the video game “Call of Duty,” led by the Swedish pension fund Sjunde AP-Fonden, accused former Activision Blizzard management, including Chief Executive Bobby Kotick, of violating their fiduciary duties to investors by consenting to a purchase price of $95 per share.

Kotick hurried into the deal, according to the shareholders, in order to maintain his position and the $400 million in change-of-control advantages.

The settlement deal will also address the counterclaims that Microsoft and Kotick brought against Sjunde.

More details about the deal are that Microsoft will fund a $250 million settlement, which is roughly about $0.30 per share for eligible former stockholders. The lawsuit, led by Swedish pension fund AP7, accused former CEO Bobby Kotick and other executives of breaching their fiduciary duties. 

The shareholders claimed Kotick accepted a $95 per share valuation to rush the sale, shielding himself from liability over workplace misconduct scandals while securing a 400 million pay-out. The settlement resolves all pending claims, including counterclaims from Microsoft and Kotick against AP7.

The impact of the settlement is a minor cost for Microsoft, which represents less than 0.5% of the $75.4 billion deal. It allows the company to permanently close out legal risks inherited from the merger. The case has also set an important legal precedent. Delaware’s Court of Chancery pointed out major flaws in passive oversight and merger approval processes. 

As a result, Delaware’s General Corporation Law is now in the process of reform to improve how boards handle conflicted executives.