Court temporarily blocks Activision Blizzard separation deal

Delaware Chancery Court issues preliminary injunction following shareholder's bid to block the sale.

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Activision Blizzard's attempt to separate itself from parent company Vivendi has been put on hold. The Delaware Chancery Court this week issued a preliminary injunction following multiple lawsuits from shareholders seeking to block the deal.

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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.

"Activision Blizzard remains committed to the transaction and is exploring the steps it will take to complete the transaction as expeditiously as possible," the company said in a statement.

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.

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

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