Vivendi Appeals Delaware Ruling on Stalled Activision Sale

   By Peg Brickley and Sam Schechner 
 

Activision Blizzard Inc. (ATVI) and parent Vivendi SA (VIV.FR) have filed an emergency appeal of a ruling that blocked Vivendi's $8.2 billion sale of most of its controlling stake in the videogame maker.

The company is seeking to upset a preliminary injunction that says shareholders must vote before Vivendi is permitted to sell most of its 61% stake in Activision.

Papers filed with the Delaware Supreme Court say the Sept. 18 decision by Vice Chancellor Travis Laster to enjoin the transaction "irreparably harms" Activision minority shareholders, putting at risk the $1 billion gains the stock made after the deal was announced.

"The injunction leaves Activision and its stockholders in limbo and at risk of losing an $8 billion deal that will return the company to public control," lawyers for Activision wrote.

Attorneys for the shareholders who sued and won an injunction from Delaware's Court of Chancery couldn't immediately be reached for comment Monday on the appeal. They unsuccessfully attempted to persuade the Supreme Court to turn down the bid for a hearing from Vivendi and Activision.

A spokeswoman for Activision didn't immediately have any additional comment. Last week, both Vivendi and Activision Blizzard said in statements that they remained committed to sealing their deal quickly, and were looking into how to do so.

The Delaware high court has scheduled an Oct. 10 hearing on Vivendi and Activision's bid to upset the ruling, which is premised on the idea the transaction is a business combination requiring a vote, instead of a share buyback, as Vivendi contends.

Judge Laster's ruling puts the deal in danger because there is no way to get a shareholder vote before the Oct. 15 termination on the agreement, Activision told the Delaware Supreme Court.

The planned sale of its Activision stake--down to about 12% initially--is part of Vivendi's strategy to reshape itself as a smaller media company. It plans to use the proceeds of the sale, along with another potential deal to sell its stake in African phone operator Maroc Telecom (IAM.CL) to pay down debt, allowing it to spin off French phone operator SFR.

Write to Peg Brickley at [e-mail] and Sam Schechner at [e-mail]

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