The Delaware Court of Chancery Sends Activision/Microsoft Merger Challenge to Trial

October 02, 2025

The Delaware Court of Chancery has denied defendants’ motions to dismiss claims that Prickett Jones brought on behalf of its representative institutional client, Sjunde AP-Funden (“AP7”), arising from Activision Blizzard, Inc.’s sale to Microsoft Corporation for $95/share.  The Court held that the complaint stated claims against (i) Activision’s former CEO Robert Kotick and board of directors for violating 8 Del. C. § 251 and 8 Del. C. § 141 in connection with their approval of the merger and the merger agreement; (ii) Kotick and the board for breaching their duty of loyalty by running a sales process designed to protect Kotick from the fallout of a company-wide sexual harassment scandal; and (iii) Activision, Kotick, Activision’s board, and Microsoft for closing a statutorily invalid merger and filing a false merger certificate to do so, which constituted conversion of the Activision stockholders’ shares.  The Court also held that defendants converted their motions to dismiss claims challenging the payment of dividends on Activision treasury shares into motions for summary judgment requiring discovery.

The action is captioned Sjunde AP-Fonden v. Activision Blizzard, Inc., et al., C.A. No. 2022-1001-KSJM (Del. Ch.).  The Court’s denial of defendants’ motions to dismiss is the fourth favorable merits decision that Prickett Jones has secured for AP7 and the putative Class in connection with the merger.  See here; see also In re Activision Blizzard, Inc., 2024-0466-KSJM (Del. Ch.), Dkt. No. 27.

Prickett Jones Directors Michael Hanrahan, Corinne Elise Amato, Kevin H. Davenport, Stacey A. Greenspan and Associates Kirsten M. Valania and Christine N. Chappelear are litigating the class action on behalf of AP7.