Activision Blizzard files emergency appeal over decision blocking sale

Publisher and parent company Vivendi seeking appeal of preliminary injunction that blocked $8.2 billion sale.

Activision Blizzard and parent company Vivendi have filed an emergency appeal of last week's ruling that halted the game publisher's attempt to separate itself from Vivendi in an $8.2 billion deal, according to documents obtained by The Wall Street Journal.

"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 Blizzard said in papers filed with the Delaware Supreme Court.

The Delaware Chancery Court issued a preliminary injunction last week following multiple lawsuits from shareholders seeking to block the deal. The transaction will continue to be halted until its terms are modified on appeal or the transaction is approved by a shareholder vote of non-Vivendi stockholders.

According to The Wall Street Journal, Activision Blizzard told the court that there would be no way to get a shareholder vote before the October 15 termination on the agreement, putting the deal in danger. The Delaware Supreme Court has scheduled an October 10 hearing for Vivendi and Activision Blizzard's opposition to the ruling.

Last week, Activision Blizzard said it remained "committed to the transaction" and is exploring ways in which to get the deal done expeditiously.

In July this year, Activision Blizzard announced its intention to separate from its parent company, Vivendi. The purchase would see around 429 million shares change hands, totaling roughly $5.83 billion in cash.

Activision CEO Bobby Kotick and co-chairman Brian Kelly are responsible for the purchase of 172 million shares, worth an estimated $2.34 billion. The pair have personally contributed $100 million to secure the sale. As a result, Kelly would become sole chairman under the restructure, with Vivendi retaining a minority 12 percent stake in the business.

The deal was orchestrated by Activision Blizzard's management team and assisted by investors. The intended trade would result in shareholders owning a controlling stake in the business.

Earlier this month, shareholder Douglas M. Hayes stated in a lawsuit that the sale would "unjustly enrich Kelly, Kotick, and the other participants."

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

40 comments
DespVand
DespVand

I don't care who Activision is owned by... or who gets the profits... just make good games or you won't have profits!!!

nyran125tk
nyran125tk

can we please get some justice on bankers and thes epeople that use company money adn tax money to enrich themselves? its not just these people EVERYONE whos rich is doing it.

nurnberg
nurnberg

By reading those kind of articles, I get the idea that a good portion of Activision's profits go directly in the pockets of Bobby Kotick, and it pisses me off.

eyeball2452
eyeball2452

"According to The Wall Street Journal, Activision Blizzard told the court that there would be no way to get a shareholder vote before the October 15 termination on the agreement, putting the deal in danger."

"The deal was orchestrated by Activision Blizzard's management team and assisted by investors."

If this were a university level case study, the above quotes would be cited as red flags.  Knowing a little bit of Activision's history, is anyone surprised that the executives not acting in the best interests of the shareholders or consumers?

chibi-acer
chibi-acer

I'm not keen on Kotick and Kelly having all the power, but Vivendi just (tried?) to force Activision into debt, so I'm not sure they're the best to have the controlling interest either.

DESTROYRS_F8
DESTROYRS_F8

Too bad this was not part of Franklin's assassination missions on GTA V.  Would love how the stock market would turn out :D

lifeline81
lifeline81

The judge here is a BIG troll. 

vadagar1
vadagar1

oh look this voodoo doll I have with blizzard's logo on it is bleeding!! :O

time to put another needle I guess 

brxricano
brxricano

Oooh its an emergency! lolololol help summody save mah billionzz from turnin back inna hundridz of millionzz ROFL fuckin rich ppl yo smh

commanderxp90
commanderxp90

Bobby swallow the money and your soul. Bobby better go to hell. O.o

Vodoo
Vodoo

Why would Vivendi even want to sell ActBlizz? It's a cash cow for them.

enoslives7
enoslives7

Blizzard is still Activision's bitch.......too bad

McGregor
McGregor

What really needs to happen is Blizzard needs to break off and be their own company again.

Hurvl
Hurvl

I don't know if things would change or improve if Vivendi didn't own Activision Blizzard, so I'm at a loss on who to root for. Even though the idea of a huge company being owned by an even larger company makes you think of box-with-in-a-box conspiracy theories (who is *really* calling the shots?), I'm not sure Activision Blizzard being independent will make much of a difference. Much or all of what they're blamed for is their own doing, I think, not Vivendi's.

jcknapier711
jcknapier711

They got nearly 100% return on their money, and they're complaining?

mkdms14
mkdms14

So because someone who has alot of money and invested in the hope of getting richer is bad?  I don't know the details of this lawsuit but what is wrong with these people?  Its there money let them do what they will, as long as its not illegal.

vadagar1
vadagar1

MAAHAHAHHAHAHAHAHAAHHAHAHAHA

I told u blizzard ... u fucked with the wrong warlock when u gave me that ... THING u call diablo 3

please me again and MAYBE I won't continue destroying you 

frozenux
frozenux

Sharks fighting among themselves...another average day in the corporate world.

blackothh
blackothh

Hey, you were stupid enough to get on the stock market, now have fun figuring out that the people that have no clue about making games or running buisnesses are now going to claw for their free money.

ziproy
ziproy

As with anything the big companies do, something smells fishy about this deal

Marikhen
Marikhen

@DespVand You probably should care since Vivendi was, based on what I could find on the subject, a major component in the cancellation of Diablo 3 and the dissolution of Blizzard North.

Daemoroth
Daemoroth

@eyeball2452 Really? Saving the company from a $1.5bn debt after a massive dividend payout forced by Vivendi is not acting in the best interests of the shareholders?

Pick one: the company that you own shares in can either

a) pay a S***load of money to the current majority own through a forced dividend payout, leaving the company with nothing to show but an estimated $1.5 billion debt AFTER they cancelled their latest project (Project Titan). Let's not forget that to get the dividend payout to happen said majority holder will shake up the board and place their own people there, people with no interest to run the company but solely there to vote "yes" when the question of a dividend is brought up. or...

b) Get management and the most powerful shareholders together and buy their independence from said parent company, avoid the debt and walk away a "free company" able to continue business as usual. Oh, yes, obviously in order to do this quickly before the dividend payout is forced shopping around for buyers has to be cut short and some people may be given the opportunity to get a big piece of stock.

I know which option I'd pick, every time.

DarkRaven0021
DarkRaven0021

@brxricano This post is why I say with all due reverence to any and all young people "Get a good education" and "Speak with intelligence".

Tumyum
Tumyum

@brxricano Wtf just went through your mind and decided to write like that? Drop it dude! Shit getting old!

Solace427
Solace427

@Vodoo Activision is strong enough to stand on its own. Vivendi will still have 12% holdings in the publisher. When you look at this in terms of billions of dollars, Vivendi is still getting a nice sum on top of what they get from the deal in general. 

Also, it's Vivendi. I am sure they have insane cash flows from other shareholdings

Zatto-1
Zatto-1

@enoslives7 I thought gamers were (in)Activisions bitch.

Hekteur
Hekteur

@ziproy Nothing fishy. Just two big corporate heads trying to make more money. Nothing new. Nothing wrong. Just everyday's life.

solarrainuk
solarrainuk

@ziproy Could I borrow some of that tin foil on your head? I need to bake some cake.

vadagar1
vadagar1

@svaargod ain't that the punch line of all humanity since the beginning of time