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Report: Former Activision Parent Company Considered Firing CEO Kotick
Last year, Activision bought its independence from ailing parent company Vivendi to the tune of $8 billion. The move was orchestrated by CEO Bobby Kotick, who lead an investor group responsible for $2.34 billion of the funding.
Bloomberg is reporting that Vivendi considered firing Kotick during the buyout talks when it thought it didn’t need the investor group to complete the deal. Kotick, along with current company chairman Brian Kelly put up a combined $100 million of the funding, which allowed the investor group to purchase shares at a discount.
“Activision’s board of directors supports the ongoing leadership of the company by Bobby Kotick and Brian Kelly, who are the most effective executives in the interactive entertainment industry,” Activision spokesperson Maryann Lataif told us. “The recent transaction restructuring the company’s ownership has received widespread market support.”
Some investors have reacted litigiously to the matter, claiming that Kotick and Kelly improperly benefitted from the deal (and because it wasn’t an offer made the general investment population). Investors are also suing Vivendi executives who served on the Activision board during the buyout for failure to protect the interests of some shareholders.
[Source: Bloomberg]
Our Take
You can bet that Vivendi did everything in its power to find a way to do this deal with Bobby Kotick and Brian Kelly. Had they been able to, Kotick would likely have been fired and Activision would be independent today (but under new management).
The investor case will be heard in December, and while the buyout injunction initially put in place was overturned by the Delaware Supreme Court, Kotick and Kelly aren’t out of the woods. If the court sides with plaintiff Anthony Pacchia, shareholders could be due significant damages.
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