Activision May Seek Shareholder Vote on Vivendi Buyout

Activision Blizzard Inc. (ATVI) will seek shareholder approval of a management-led proposal to buy $8.17 billion of its stock from controlling shareholder Vivendi SA (VIV) if its appeal of a court injunction fails.

The world’s largest video-game maker outlined the preliminary plan in a filing yesterday with the U.S. Securities and Exchange Commission. No date was set for a vote.

Activision’s bid for independence from Vivendi could be terminated as soon as Oct. 15 if the purchases aren’t allowed to go forward by then, according to the filing. The Santa Monica, California-based company is scheduled to appear before the Delaware Supreme Court on Oct. 10 to appeal the lower-court injunction that blocked the deal.

“As of the time of filing of this preliminary proxy statement, the parties have not reached an agreement to extend the October 15, 2013 termination date, and it is uncertain whether any such agreement will be reached, or if so what the agreed-upon replacement date may be,” Bobby Kotick, Activision’s chief executive officer, wrote in the filing.

A Delaware Chancery Court judge ruled on Sept. 18 that Activision must seek approval from shareholders other than majority owner Vivendi on the proposed sale of $2.34 billion in company stock to a group led by director Brian Kelly and Kotick before the deal can be completed.

Deal Financing

Activision shareholder Douglas M. Hayes filed suit Sept. 11, arguing in court papers that the proposed private stock sale would “unjustly enrich Kelly, Kotick and other participants.” Kotick and Kelly, who are contributing $50 million each, and the rest of the investor group would emerge as the biggest shareholder with a 25 percent stake.

Activision is using cash and assuming debt to purchase $5.83 billion of additional Vivendi shares, for a combined deal that would reduce Vivendi’s stake from 61 percent to 12 percent, according to court filings.

Activision rose 1.4 percent to $16.91 at 11:58 a.m. in New York and had gained 57 percent this year as of yesterday. Vivendi rose 1.7 percent to close at 17.29 euros in Paris. The stock is up 2 percent this year.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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