New York City Sues Activision Over $68.7 Billion Microsoft Acquisition
Activision Blizzard is facing a new lawsuit that could have serious consequences for Microsoft's deal to acquire the company.
As Axios reports, the New York Employees' Retirement System (NYCERS) has filed a lawsuit in Delaware claiming that Microsoft's deal undervalues the company and that CEO Bobby Kotick was "unfit to negotiate a sale."
The NYCERS owns Activision stock and counts as the largest of the five pension systems in New York City, managing pensions for firefighters, police, and teachers. The lawsuit takes the form of a 220 Complaint, which demands that stockholders be allowed to inspect books and records. NYCERS wants to see all the material relating to the Microsoft deal and all information on the five buyers who were interested before Microsoft's offer was accepted.
The lawsuit aims to prove that the $95/share offer Microsoft made undervalues the company, but also that Bobby Kotick was unfit to negotiate the deal in the first place. That second claim relates to the sexual misconduct and discrimination toward women which occurred at the company. The complaint suggests rapid negotiations were carried out to allow "Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty."
Microsoft is awaiting regulator approval to complete the acquisition, but the FTC wants more information before deciding. Activision decided to settle a discrimination lawsuit filed by the US Equal Employment Opportunity Commission for $18 million, but this latest lawsuit could end up revealing new information regarding discrimination at the company.
If the NYCERS lawsuit proves successful, it could result in Microsoft being forced to either walk away from the deal or increase its offer. In
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