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.
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."