Robert Kotick reportedly threatened to quit as Activision Blizzard Inc.’s chief executive unless the board accepted his vision of the buyout of most of Vivendi’s stake in the company, according to claims in a shareholder lawsuit over the deal.
The Santa Monica video game maker, which is incorporated in Delaware, had convinced the Delaware Supreme Court that it wasn’t necessary to put the $8.2 billion deal that closed in October to a shareholder vote. Shareholder Anthony Pacchia said Kotick insisted the deal be financed through an investment group he had assembled and led, Bloomberg News reported Wednesday, citing Pacchia’s amended lawsuit filed in Delaware Chancery Court.
Kotick has been chief executive since 1991. When other Activision directors proposed using a public debt or equity offering to finance part of the share repurchase, he threatened to quit, the lawsuit said, which would have imperiled bank financing necessary for the deal. Kotick’s group included board member Brian Kelly, West L.A. private equity firm Leonard Green & Partners and Tencent Holdings Ltd., a Chinese video-game publisher.
In the deal, Activision itself bought back $5.83 billion of its stock from Vivendi, with the investment group buying another $2.34 billion in stock. The Kotick-led group now controls nearly 25 percent of Activision’s stock, making it the largest investor ahead of the nearly 12 percent Vivendi still owns.
The Bloomberg report said that Activision had not responded to requests for comment.