Microsoft’s Activision talks began after reporting sexual misconduct

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Activision Blizzard CEO Bobby Kotick attends the Allen & Company Sun Valley Conference on July 10, 2019 in Sun Valley, Idaho.

Drew Anger | Getty Images

Microsoft first contacted games publisher Activision Blizzard about a possible tie-up the same week a media report landed claiming Activision CEO Bobby Kotick had been aware of the cases for years. alleged sexual assault in the company, according to a regulatory filing released on Friday.

The filing says the companies began negotiations in November, two months before striking a $68.7 billion deal that would be the biggest purchase ever by a U.S. tech company. For Microsoft, the timing was opportunistic.

On November 16, the the wall street journal reported that women had accused Kotick of abuse. While he was aware of the misconduct allegations, he did not share all relevant information with the company’s board of directors, the Journal said.

Activision shares have fallen 11% in the four trading days since the story. That’s when Microsoft called, the new SEC filing shows.

Kotick told employees in a video message that the Journal’s reporting included “an inaccurate and misleading view of our company, me personally and my leadership.” Previously, a California state agency filed a lawsuit against Activision Blizzard for what it described as sexist culture.

Phil Spencer, head of games at Microsoft, addressed the issue of harassment internally, due to the company’s existing relationship with Activision, according to a The Bloomberg Story November 18. The next day, Spencer told Kotick, while speaking on “a different topic,” that Microsoft wanted to talk about strategic opportunities between the two companies, according to the filing.

On November 20, Microsoft CEO Satya Nadella told Kotick on a call that he wanted to explore an acquisition, according to the filing.

Initially, Microsoft was considering an offer of $80 per share. That’s what Spencer conveyed to Kotick and Activision President Brian Kelly on Nov. 26. The price would have represented a premium of nearly 32% over the previous day’s close.

Negotiations evolved and the two parties finally agreed on a price of $95 per share, announced by Microsoft on January 18. Activision Blizzard stock closed at $81.05 per share on Friday.

Kotick contacted a handful of other companies before the announcement, according to the filing. Kelly also received an email from an individual, unnamed on file, who expressed interest in a purchase of the Blizzard Segment or a decision to take part or all of Activision Blizzard privately.

Microsoft expects to complete the transaction in the fiscal year ending June 30, 2023. The deal could help Microsoft add customers to Game Pass, its service that provides access to hundreds of games on Xbox consoles and devices. pc.

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