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Not everyone's happy with Activision Blizzard's Vivendi split
Not everyone's happy with Activision Blizzard's Vivendi split
August 5, 2013 | By Kris Ligman

August 5, 2013 | By Kris Ligman
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With Activision Blizzard buying its majority stake back from media conglomerate Vivendi, a lawsuit has emerged contending that the deal was drawn up not to benefit Activision, but its board of directors.

Activision Blizzard announced two weeks ago that it was buying back $5.83 billion in shares from majority shareholder Vivendi, with another $2.34 billion being purchased in a private sale by the investor group, which is led by Activision CEO Bobby Kotick and co-chair Brian Kelly.

In conjunction with the announcement, Kotick stated that the purchase would "represent a tremendous opportunity for Activision Blizzard and all of its shareholders" [PDF].

However, shareholder Todd Miller contends otherwise. In his July 26th filing with the Los Angeles superior court, Miller contends that "there [is] no apparent business purpose" to involving the insider investor group to participate in the reacquisition of company shares, "other than to aggrandize [the defendants] and provide billions of dollars' worth of Activision stock to the insider investor group at a discounted price."

The 11-person board of directors -- which in addition to Kotick and Kelly contains several other former Vivendi executives -- stands to "score an immediate paper windfall of $664 million," according to the lawsuit.

The suit further asks the court to rescind the purchase agreement, as well as to order Activision to implement checks against "future one-sided self-dealing."


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Comments


Alex Boccia
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I find it hard to believe anybody involved cares about videogames.

Zach Grant
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Board of directors gains $664M along with inevitable upcoming layoffs needed to balance the books after a project ships.

That's 6640 salaries they could pay instead. How the F' do we let them get away with things like this?

Michael Joseph
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We choose to buy their products (though in the case of many non entertainment products it's unavoidable), work for them or sell our privately owned businesses to them for the big payday.

I really don't have much sympathy for the savvy shareholders that get burned while dancing with the devil. Savvy shareholders fully expect corporations to ruthlessly maximize the value of their shares regardless of the negative effects on families, society, culture, environment, etc, but they don't want the monsters they feed to turn around and bite them.

We tend to form compartmentalized views of our actions not wanting to see the interconnectedness between an action and a removed result particularly if it's a negative result.


Todd Masten
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Business 101 Multiple Choice Time

The goal of any firm is to:

a) keep people employed and working.

b) make the greatest products possible.

c) maximize shareholder wealth.

Jonathan Murphy
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I hope it doesn't turn into a pump and dump. Lower the stock value, then boots it. Unload the stock, make a fortune, and leave the company. The reality is Activision will need time to pay off the debt they incurred. If project Destiny flops it'll be a massive blow.

Blizzard's working on a new MMO, Diablo 3 and SC2 expansions. Activision has Skylanders(Disney doesn't have a chance) and CoD. Still... Activision is relying heavily on franchises.

Jason Long
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True... but those are also the most profitable franchises in the history of gaming.


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