Activision being sued by another shareholder over stock buyback deal

By Stephany Nunneley, Thursday, 12 September 2013 13:51 GMT

Activision Blizzard is being sued by a shareholder in order to stop the company and the investment group headed by CEO Bobby Kotick and Brian Kelly from buying back stock in the firm

Filed by Douglas M. Hayes (via Polygon), the suit claims the company’s board and general partners failed to submit matters relating to stock for majority stockholder approval.

Hayes alleges the board and Vivendi “breached its duties” by approving the 172 million shares purchase by ASAC for $2.34 billion. His suit also claims Kotick and Kelly “usurped a corporate opportunity from the company” and will be “unjustly enriched through the private sale.”

The suit is seeking an injunction against the transaction, for the private sale to be rescinded and for Kotick, Kelly and general partners to divulge the sum of which each have “allegedly been unjustly enriched.”

This isn’t the first bump Kotick and Kelly have faced since On July 26 Activision announced it had arranged to buy back around 429 million shares of company stock from Vivendi, and “certain tax attributes” for $5.83 Billion to effectively sever ties.

Back in August, shareholder Todd Miller filed a legal complaint against the company and Vivendi, to stop the investment group headed up by Kotick and Kelly from buying back stock in the firm.

Miller named the board of directors in the suit as well for “breach of fiduciary duties, waste of corporate assets and unjust enrichment.”

Miller stated that Vivendi – which is $17 billion in debt – was so desperate for cash, it created a conflict of interest for Activision Blizzard’s board of directors- six of which also serve on Vivendi’s board.

The complaint also stated the deal would shortchange shareholders should the company sell 172 million shares to Kotick and Kelly’s investment group at a 10% discount on the closing share price the day before the deal was announced.

The deal was scheduled to be complete by September, but the lawsuits seems to be holding it up.

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