Vivendi OK’d to Sell Majority Stake in Activision10 Oct, 2013 By: Chris Tribbey
Vivendi Oct. 10 got the go-ahead to sell the majority of its interest in gaming company Activision Blizzard, after the Delaware Supreme Court lifted a preliminary injunction imposed on the transaction.
Vivendi in July announced it would divest more than 85% of its interest in Activision Blizzard for more than $8 billion. The sale is expected to be completed by Oct. 15, Vivendi said.
The sale was moving along up until mid-September, when an Activision Blizzard shareholder filed a lawsuit, alleging the sale required shareholder approval. The court ruled that company’s shareholders did not have standing to challenge the sale. Vivendi owns more than 61% of Activision Blizzard, or 684 million common shares. It’s selling 429 million back to Activision Blizzard, and 172 million to a consortium of investors.
“This transaction represents an important step forward in the strategic review conducted by the Vivendi Supervisory Board over the last year,” said Jean-François Dubos, chairman of the Vivendi Management Board. “It provides the group with greater financial flexibility and creates value for our shareholders. Vivendi is progressing at its own pace in the announced restructuring, to reach new growth milestones.”
Wedbush Securities analyst Michael Pachter said investors would greet the sale positively.
“We expect investors to react positively to Thursday’s ruling, as it removes an overhang on Activision Blizzard shares,” he wrote in a note to investors. “Notwithstanding pessimism about the transition year between console cycles, Activision continues to see many positive catalysts that could lead to further multiple expansion.”
He wrote that Activision is doing well with sales of Call of Duty, Skylanders Giants toys and a “return to stability for World of Warcraft subs.”