Activision-Vivendi Sale: U.S. Court Pauses the Game

Activision-Vivendi sale: A Delaware court decision has put Vivendi SA (EPA:VIV)’s planned $8.2 billion sale of most of its 61% stake in Activision Blizzard, Inc. (NASDAQ:ATVI) on hold. The ruling comes as a response to a lawsuit filed by a minority shareholder last week. He argued that the transaction should be subject to approval by a majority of Activision Blizzard’s minority shareholders. Despite the impasse, both companies assured that they remain committed with the completion of the deal and are looking for the right way to do so.

According to Activision, the proposed deal stipulates that the company will purchase about 429 million shares from Vivendi SA  for an approximate $5.93 billion in cash, or $13.60 per share. The remaining 172 million shares will be bought by ASAC II LP, a consortium of investors that includes Activision’s CEO, Bobby Kotick, and its co-chairman, Brian Kelly, for approximately $2.34 billion. Kotick has made clear his intention to eventually buy out Vivendi so that Activision’s management can have full control of the company and its products, which include the best selling franchises  “Call of Duty” and “World of Warcraft.”

As stated by The Wall Street Journal, the divestment is part of Vivendi’s strategy to restructure itself as a smaller pure-play media company. “Its entertainment and media assets—Universal Music Group, French TV and-film company Canal Plus—would be on one side, and its French telecommunications unit, SFR, on the other.”

However, the resolution is now uncertain. The injunction opens the possibility of the deal not being closed before October 15^th. After this date, any of the parts involved have the option to back out of the transaction. So, unless “Activision wins an appeal against the injunction it will have to call an extraordinary general meeting, a process that usually requires 60 days’ notice” (TheStreet).

Meanwhile, Take-Two Interactive Software, Inc. (NASDAQ:TTWO) continues to rise in the markets, mainly on the back of its recently released “Grand Theft Auto V,” which accumulated about  $800 million in sales world-wide on its first day. Check back for more updates on the Activision-Vivendi sale process.

 Disclosure: Javier Hasse holds no position in any stocks mentioned

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