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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.

Yahoo Nears $1.4 Billion Deal to Sell AOL to Italy’s Bending Spoons

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Yahoo is close to finalizing a deal to sell its AOL unit to Italian technology company Bending Spoons for about $1.4 billion, according to four sources familiar with the matter. The sale would mark the latest chapter in the decline — and reinvention — of one of the internet’s earliest giants.

The Milan-based app developer is in advanced negotiations to purchase AOL, the sources said, but cautioned that no final agreement has been signed, and the talks could still collapse.

Yahoo, owned by Apollo Global Management, did not respond to Reuters’ request for comment, while both Bending Spoons and Apollo declined to discuss the ongoing talks. Apollo acquired a 90% stake in Yahoo from Verizon in 2021 in a $5 billion deal.

FROM INTERNET ICON TO REVAMP OPPORTUNITY

Once the dominant force of the early internet, AOL was synonymous with the “You’ve Got Mail” era and played a defining role in the online revolution of the late 1990s. Its 2000 merger with Time Warner, then the largest corporate deal in history, ended in massive losses and regulatory scrutiny — symbolizing the collapse of the first dot-com boom.

A successful sale to Bending Spoons would be a fresh start for the AOL brand, adding its advertising and subscription-based services — including LifeLock, LastPass, and McAfee Multi Access — to the Italian company’s fast-expanding portfolio.

A source familiar with AOL’s recent performance said the company has seen 20% year-over-year website traffic growth, driven primarily by users aged 25 to 54, a shift from its traditionally older demographic. The rise is attributed to new content verticals such as Health, Science & Tech, Home & Garden, and True Crime.

BENDING SPOONS: EUROPE’S RISING TECH STAR

Founded in 2013 by Luca Ferrari, Bending Spoons has become one of Europe’s most prominent tech firms, known for acquiring struggling digital platforms and modernizing them. Its apps now attract 300 million monthly users worldwide.

The company was valued at $2.55 billion after a February 2024 funding round, earning it “unicorn” status — a rarity in Italy’s tech ecosystem.

Bending Spoons has recently been on an acquisition spree, purchasing WeTransfer earlier this year and agreeing to take Vimeo private for $1.38 billion in what is currently its largest deal.

Adding AOL’s global reach would further bolster the company’s ambitions and position it as a potential IPO candidate in the United States. CEO Luca Ferrari previously told Reuters that while no immediate plans exist for a public listing, the firm is “working to be ready” and looking to expand beyond Europe.

If completed, the $1.4 billion AOL acquisition would cement Bending Spoons’ role as a new European powerhouse reviving legacy internet brands for the AI and mobile era.

Telefonica Eyes M&A to Drive European Telecom Consolidation, CEO Murtra Says

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Telefonica (TEF.MC) is preparing a bold M&A strategy to reshape Europe’s fragmented telecom market, while offloading assets in Latin America to free up capital, CEO and Executive Chairman Marc Murtra told Reuters. His first strategic plan since taking the helm in January envisions building “titanic European operators” to compete globally in telecoms, AI, and digital infrastructure.

Murtra argues that Europe’s market is too fragmented—with 41 operators serving more than 500,000 customers each, compared with just five in the U.S.—and consolidation is needed for competitiveness. Regulators, long wary of higher prices, may now be more open as geopolitical tensions drive Europe to reinforce its strategic autonomy in defense and critical infrastructure.

To fund acquisitions, Telefonica has already agreed to sell its Argentina and Uruguay units, while exploring sales in Chile, Mexico, and Ecuador, which analysts say could free up €3.6 billion ($4.2B). The group has not commented on reports it may raise additional capital.

Potential M&A targets include Vodafone Spain, Germany’s 1&1, assets in Brazil, or Liberty Global’s 50% stake in Virgin Media O2, according to analysts and dealmakers. Meanwhile, French rivals Orange, Bouygues, and Iliad are rumored to be circling Altice’s SFR, signaling a wave of regional consolidation.

Murtra’s vision also involves a “social contract” with regulators: allow consolidation in exchange for commitments to invest in cybersecurity, AI, and data centers. “Imagine a Europe where the satellite systems, the hyperscalers and artificial intelligence are in the hands of tech bros—and this could happen,” Murtra warned.

Telefonica’s shares have rallied since Murtra’s appointment, though its market cap has halved since 2015, and it remains among Europe’s most shorted stocks. Still, analysts see merit in the plan. Moody’s Carlos Winzer noted that scale is “absolutely fundamental” in telecoms, while investment bankers predict country-level consolidation first, followed by cross-border deals.

If Telefonica succeeds, it could trigger a wave of European telecom M&A, pulling in giants like Orange, Deutsche Telekom, and BT, and redefining the continent’s digital infrastructure landscape.