Activision Blizzard's move to break away from French parent company Vivendi Universal has been halted the Delaware Chancery Court following the "Hayes v. Activision Blizzard, Inc." lawsuit instigated a shareholder, the company announced today.
Activision Blizzard announced in late July that was breaking away from Vivendi Universal and buying itself back in a two-part share acquisition for $8.17 billion. The deal involved Activision buying back roughly 429 million shares from Vivendi for $5.83 billion. Investor group ASAC II — headed by the then Activision Blizzard CEO Bobby Kotick and co-chairman Brian Kelly — will purchase approximately 172 million Activision Blizzard shares from Vivendi for $2.34 billion.
A week after the announcement, shareholder Todd Miller filed a complaint against Activision Blizzard, its board of directors and Vivendi, claiming "breach of fiduciary duties, waste of corporate assets and unjust enrichment" and that ASAC II will "score an immediate paper windfall of $664 million."
Hayes instigated the lawsuit earlier this month in an attempt to stop the separation. Activision Blizzard states that separation will remain frozen until the deal is approved by stockholder vote of non-Vivendi stockholders or the injunction is modified on appeal. The company is set on completing the the transaction and "is exploring the steps it will take to complete the transaction as expeditiously as possible."
Vivendi SA held talks about its plans to extract a $3 billion special dividend from Activision Blizzard mid-July. Vivendi wanted to sell its stake in Activision Blizzard last year to boost its stock price after a nine-year slump.
Activision and Vivendi Games' merger was announced in 2007, with the European Commission approving the deal in 2008. Upon the $18.9 billion deal's closure mid-2008, Vivendi emerged as the majority shareholder with a 52 percent stake in Activision Blizzard.
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