Activision shareholders reach $250 million settlement over Microsoft buyout

WILMINGTON, Delaware, May 22 (Reuters) – Activision Blizzard shareholders reached a $250 million settlement over allegations that former executives and Microsoft short-changed the company’s $75.4 billion acquisition of the game maker in 2023, according to a filing made public in Delaware state court on Friday.

Shareholders of the “Call of Duty” video game maker, led by Swedish pension fund Sjunde AP-Fonden, accused former Activision Blizzard executives, including Chief Executive Bobby Kotick, of breaching their fiduciary duties to investors by accepting a purchase price of $95 per share.

Shareholders said Kotick rushed into the merger to keep his job and the benefit of a $400 million change of control. In the settlement agreement, the pension fund said it contained compelling information that refuted any claim that Kotick and the Activision Blizzard defendants did not act in good faith.

Microsoft and Kotick filed counterclaims against Sjunde, which were also resolved in the settlement agreement.

According to the court file, both parties denied the accusations against them.

The defendants said they agreed to avoid distractions from the case, and Sjunde said the settlement was reached because the payment was fair.

The settlement must be approved by Kathaleen McCormick, the chief judge of the Delaware Court of Chancery who is overseeing the case.

According to the court, 40 percent of the settlement will be financed by Microsoft, with the remainder paid by directors and officers’ liability insurance. The payout amounts to approximately 30 cents for each Activision Blizzard share.

The deal was the largest in the video game industry when announced in 2022, giving Microsoft the power to compete with Sony Group.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Matthew Lewis)