U.S. court halts $8.2 billion Activision deal with Vivendi
By Malathi Nayak and Leila Abboud
SAN FRANCISCO/PARIS (Reuters) - A U.S. court has taken the rare step of halting Vivendi SA's $8.2 billion deal to sell most of its stake in Activision Blizzard Inc back to the U.S. videogame publisher, but the move is unlikely to kill the transaction, according to analysts and legal experts.
The Delaware Chancery court decision put a temporary hold on the deal's closing, after Activision investor Douglas Hayes filed a lawsuit arguing the companies breached their legal duty by failing to submit the deal to a shareholder vote.
The surprise ruling, which emerged after Wednesday's market close, delays a deal regarded as pivotal for Vivendi as it streamlines a diverse portfolio built up in a frantic 1990s spending spree.
Vivendi said in July it had agreed to sell most of its stake in the publisher of the blockbuster "Call of Duty" videogame franchise for $8.2 billion, paving the way for a broader split of the French conglomerate's media and telecoms assets.
"It is exceedingly rare for a court to enjoin a corporate transaction or shareholder vote - not never, but seldom," said Boris Feldman, a lawyer at Wilson, Sonsini, Goodrich & Rosati. Feldman's firm is not involved in the case.
Activision and Vivendi could now appeal the preliminary court decision, and if they prevailed the deal could close relatively quickly. Feldman said the Delaware courts are "extremely fast," and that the Delaware Supreme Court could be expected to rule "in a matter of weeks, not months."
Another option would be for Activision to arrange a shareholder vote, which would take longer, analysts said.
Both sides had aimed to finalize the transaction by the end of this month. Continued...