Activision Blizzard is being sued by a shareholder over alleged Securities and Exchange Act violations relating to Microsoft’s proposed $68.7 billion purchase of the company.
As reported by Polygon, shareholder Kyle Watson filed a lawsuit against the publisher on February 24, 2022, claiming the Microsoft deal is “unfair for a number of reasons” and has only be pursued so the board can “procure for themselves and senior management […] significant and immediate benefits.”
Watson also alleges the company’s SEC filing, which details the transaction, is “materially misleading and incomplete” and therefore violates the Exchange Act.
The suit specifically claims the SEC filing is missing information relating to the “ad hoc committee” that oversaw the sale. It also raises concerns about potential conflicts of interest, and alleges the Microsoft sale is “not in the best interest” of Activision Blizzard, Watson himself, or company stockholders — but notes the deal will “produce lucrative benefits for [Activision Blizzard’s] officers and directors.”
Watson wants the U.S. District Court handling the case to order Activision Blizzard to release a new SEC preliminary proxy statement that contains more information and omits “untrue statements.” They are also seeking “rescissory damages” should the transaction be completed.
In a statement sent to Polygon, an Activision Blizzard spokesperson said the company disagrees with the allegations made by Watson and looks forward to “presenting our arguments to the court.”