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Judge Rules Activision Executives, Including CEO Bobby Kotick, Must Face Lawsuit Over Microsoft Takeover

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A Delaware judge has ruled that Activision Blizzard executives, including longtime CEO Bobby Kotick, must face most of a shareholder lawsuit accusing them of shortchanging investors during the company’s $75.4 billion sale to Microsoft.

In an 83-page decision issued Thursday, Chancellor Kathaleen McCormick of the Delaware Chancery Court said shareholders could move forward with their “core” claim that Kotick and other board members breached their fiduciary duties by prioritizing personal and managerial interests over those of shareholders.

The case, led by the Swedish pension fund Sjunde AP-Fonden, alleges that Kotick rushed into the deal to secure his position and an estimated $400 million in change-of-control benefits, while shielding himself from potential liability related to sexual harassment scandals at Activision. Shareholders further claim that the $95-per-share price undervalued the company—particularly as Activision’s performance improved during the 21-month regulatory approval process before the merger closed in October 2023.

Judge McCormick’s ruling found sufficient grounds to infer that Kotick “manipulated the sale process to favor Microsoft,” which she described as offering “speed, deal certainty, and—inferably—a friendly landing place.” She also found it “reasonably conceivable” that Activision’s directors placed Kotick’s interests above those of investors, potentially allowing a lowball sale while the company’s reputation and stock price were still weighed down by harassment allegations.

However, McCormick dismissed claims against Microsoft, noting there was no evidence the company actively participated in the alleged breaches, even if it may have “passively stood by.” Other secondary claims against Activision officials were also dismissed.

With the decision, McCormick signaled that “litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch,” adding pointedly: “Game on.”

The case, Sjunde AP-Fonden v. Activision Blizzard Inc. et al, continues in the Delaware Chancery Court under docket number 2022-1001, marking another chapter in the post-merger fallout surrounding one of the gaming industry’s largest acquisitions.

Microsoft and OpenAI strike non-binding deal to enable restructuring

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Microsoft and OpenAI announced on Thursday that they have signed a non-binding agreement to redefine their partnership, paving the way for OpenAI to restructure into a for-profit company. The move would allow the ChatGPT creator to adopt a more conventional governance model, raise capital more freely, and potentially pursue an eventual IPO.

While details of the new commercial terms were not disclosed, both companies said they are working toward a definitive agreement. The talks mark a major shift in one of the most closely watched partnerships in the AI sector, forged to fuel the global boom in generative AI.

Microsoft has invested $11 billion in OpenAI since 2019 and until recently enjoyed exclusive rights to market OpenAI’s tools through its Azure cloud platform. But the dynamic has shifted: OpenAI has launched its own Stargate data center project, signed $300 billion in contracts with Oracle, and struck another cloud deal with Google, signaling its desire to diversify partnerships and reduce reliance on Microsoft.

For its part, Microsoft wants to preserve access to OpenAI’s technology even if OpenAI claims to reach artificial general intelligence (AGI) — a threshold that under current terms would end the partnership.

OpenAI is targeting a $500 billion valuation, with its nonprofit arm set to receive more than $100 billion, according to chairman Bret Taylor. The conversion still requires approval from attorneys general in California and Delaware, and OpenAI risks losing billions in tied funding if it fails to finalize the transition by year-end.

The evolving relationship underscores the growing competitive tension between the two. Microsoft is developing its own AI models to reduce dependency, while both companies continue to compete in enterprise tools and consumer-facing chatbots.

Computershare Launches Investor Engagement Arm, Hires JPMorgan Veteran for North America

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Computershare announced Friday the launch of a new investor engagement business aimed at helping companies navigate increasingly complex shareholder relations and rising activist pressures.

The new unit will provide insights into who is buying or selling a company’s equity and debt, investor relations support, and strategic governance advice via its Georgeson Advisory arm. It will also integrate services from recent acquisitions CMi2i and ingage.

Key offerings include:

  • Detecting early signs of activist investors building stakes.

  • Aligning corporate strategy with shareholder expectations.

  • Advising management teams during crisis events such as proxy fights or takeover bids.

The global division will be led by Kirsten van Rooijen, while Aaron Bertinetti, a former JPMorgan Chase executive, has been appointed to head operations in North America. Bertinetti previously served as Managing Director of Investor Relations and Head of ESG at JPMorgan, and earlier led global research and corporate advisory at Glass Lewis, specializing in M&A and shareholder activism.

Analysts say demand for such services is surging as investors push boards for stronger performance, governance reforms, and even leadership changes. With its expanded capabilities, Computershare aims to position itself as a critical adviser for companies navigating the high-stakes world of shareholder engagement.