Swedish pension fund AP7 has sued Activision, its board of directors and Microsoft in connection with Microsoft’s proposed acquisition of Activision.

In the US court case, AP7 alleges that the process surrounding the acquisition, as well as the bid and terms, were not done correctly and had disadvantaged Activision’s shareholders.

Activision’s shareholders include AP7 and its savers.

AP7 claimed that allegations and investigations of sexual harassment at the company had created a negative impact on the share price of Activision.

The lawsuit added that the CEO of Activision negotiated the merger with Microsoft, which included a provision that allowed him to continue as CEO while the acquisition was pending review by US and international regulators.

Other board members supported the merger, and the controversies resulted in Activision being undervalued at the time of the merger, according to AP7’s court challenge, which also stated that the CEO and other board members were “unfairly” protected at the expense of shareholders.

AP7 hopes that a judgment or settlement will be made to compensate Activision's shareholders for the “harm they suffered as a result of the flawed merger process and unfairly low bid price”.

“Legal processes are one of AP7's ownership tools to protect the interests of our savers,” the pension fund said.

“AP7 takes advantage of the opportunity to pursue legal processes through class actions against companies that have treated shareholders incorrectly and negatively affected the share price.

“As in this case, it is to protect the interests of our savers as the purchase price would otherwise have been higher.”

Speaking to Bloomberg Law, Activision spokesperson, Joe Christinat, defended the transaction: “This is a great deal for shareholders. We garnered 98 per cent approval of votes cast.

“The board went through a thorough process to decide the right move for employees, shareholders, and players.”

Additionally, a spokesperson for Microsoft told Bloomberg Law in a statement that “our proposed acquisition of Activision Blizzard was negotiated lawfully and fairly”.

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