Nov 19 (Reuters) - Videogame maker Activision Blizzard reached a record $275 million settlement over a lawsuit by a shareholder who opposed the company’s 2013 deal to acquire its stock that was held by Vivendi SA.
The owner of the “World of Warcraft” and “Call of Duty” games said in a statement Wednesday the money would be paid by insurance companies and unidentified defendants.
The payment settles a class action and what is known as a derivative lawsuit in which a shareholder sues on behalf of the company. As a result, the money will be paid to Activision rather than Activision’s shareholders.
No party acknowledged wrongdoing, according to Activision.
The settlement is the largest of a shareholder derivative lawsuit, topping last year’s $139 million settlement involving News Corp.
Other large derivative lawsuit settlements include a $122 million settlements paid by Oracle Corp’s Chief Executive Larry Ellison in 2005.
The lawsuit by Activision shareholder Anthony Pacchia was prompted by the $8 billion deal in 2013 in which Activision and an investor group known as ASAC bought the videogame maker’s stock from Vivendi, a French media-focused conglomerate.
Pacchia said that Activision Chief Executive Bobby Kotick and Co-Chairman Brian Kelly breached their fiduciary duties for their role in the deal as participants in the ASAC group. ASAC bought 172 million Activision shares from Vivendi alongside the 429 million purchased by Activision.
Pacchia said that Kotick and Kelly negotiated a transfer of control from Vivendi to themselves, rather than a repurchase of control by Activision.
According to the fifth amended complaint, they also negotiated for themselves to receive 25 percent of the price gains on ASAC’s Activision stock once certain thresholds are met, even though they only contributed 6 percent of the equity of ASAC.
Pacchia also named as defendants Activision directors, Vivendi and the ASAC investor group.
As part of the settlement, two unaffiliated directors will be added to the Activision board and ASAC’s voting rights will be cut to 19.9 percent from 24.9 percent, according to a letter filed with the court.
The parties anticipate the settlement will be filed by the end of next week. The agreement requires court approval by Delaware Court of Chancery judge Travis Laster. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Grant McCool)