Activision shareholders reach $250 million settlement over Microsoft buyout

By Tom Hals

WILMINGTON, Delaware, ‌May 22 (Reuters) - Shareholders ​of ​Activision Blizzard reached a $250 million settlement over allegations that the company's former executives and Microsoft shortchanged them when ‌Microsoft acquired the game maker for $75.4 billion in 2023, according ⁠to a filing made public on Friday in a Delaware state court.

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 agreeing to a $95-per-share takeover price.

The shareholders said Kotick rushed in to the merger so he could keep ⁠his job and $400 million of change-of-control benefits. In the settlement agreement, the pension fund said ​there was compelling information that undermined any claim that Kotick and the Activision Blizzard defendants failed to act ​in good faith.

Microsoft and Kotick brought counterclaims ‌against Sjunde, which will also be resolved in the settlement agreement.

Both sides denied the allegations against them, ⁠according to the court filing.

The defendants said they were settling to avoid the distraction of litigation and Sjunde said it was settling 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 litigation.

The settlement will be funded 40% by Microsoft, while the remainder will be paid by directors and ‌officers' liability insurance, according to a court filing. The payment amounts to around 30 cents for each ‌Activision Blizzard share.

The deal was the largest in the video game industry ⁠when it was unveiled in ‌2022 and gave Microsoft ​the heft to compete with Sony Group .

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

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