Universal Music parent company Vivendi’s plan to sell most of its stake in gaming firm Activision Blizzard has hit a hurdle in the form of a lawsuit by another shareholder, though most reckon the litigation is only a temporary setback.
Vivendi announced that it was selling 48% of its 60% stake in Activision, leaving it with just 12%, back in July in a $8.2 billion deal, part of the French conglom’s strategy to refocus its energies on its music and television businesses. The shares were bought by Activision itself, and a consortium of individuals led by the gaming company’s CEO Bobby Kotick and Co-chairman Brian Kelly.
But another Activision investor, Douglas Hayes, has filed a lawsuit arguing that the gaming company should have put the deal to a shareholder vote before agreeing terms with Vivendi. And having received Hayes’ legal papers, the Delaware Chancery court has now put a temporary block on the transaction.
Vivendi and Activision had hoped to have the share sale completed by the end of this month, though that now looks unlikely. To overcome Hayes’ legal challenge Activision could simply organise a shareholder vote on the deal, though legal experts have told Reuters that it would actually be quicker to appeal this week’s court ruling, because the Delaware Supreme Court would likely consider such an appeal in weeks rather than months.
Analysts reckon that the legal challenge is a temporary setback, and even if Activision is forced to put the deal to a vote amongst its non-Vivendi shareholders, the transaction would likely get approval. As a result Activision’s share price was not hugely affected by the ruling.
Though for Vivendi, which is now looking into off-loading most of its telecom assets so it can properly focus its attentions on a new period of growth around its remaining businesses, Universal Music and Canal+, the delay on this lucrative share sale will be irritating.