X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

The Delaware Supreme Court has approved the video game publisher Activision Blizzard Inc.’s plan to buy back $5.8 billion in shares from Vivendi SA, handing a major come-from-behind victory to lawyers at Wachtell, Lipton, Rosen, & Katz and Skadden, Arps, Slate, Meagher & Flom.

Reversing a ruling from the Delaware Court of Chancery, the court ruled Thursday that Activision’s bylaws don’t require the company to let non-Vivendi shareholders vote on the share buyback plan. Chief Justice Myron Steele announced the court’s unanimous decision from the bench, following an oral argument Thursday morning. The court also issued a one-page order explaining its decision.

Under the terms of the deal, first announced in July, Vivendi will sell 427 million Activision shares back to the company for $5.83 billon. ASAC LP, an investor group spearheaded by Activision CEO Robert Kotick, will acquire another $2.34 billion in Vivdendi shares. The combined $8.2 billion deal has a termination date of Oct. 15.

Two plaintiffs firms — Prickett, Jones & Elliott and Kessler Topaz Meltzer & Check — brought a shareholder derivative suit over the deal on Sept. 11. The plaintiffs firms wanted an order blocking the deal, arguing that it amounted to either a merger or a business combination between Activision and Vivendi. Under Activision’s bylaws, mergers and business combinations required a shareholder vote. The defendants named in the complaint included Activision’s board, ASAC, and a special committee of Activision’s independent directors that signed off on the deal.

Delaware Vice Chancellor Travis Laster preliminary enjoined the deal on Sept. 18. Siding with the plaintiffs, he ruled from the bench that “the concept of business combination encompasses this deal.”

The Delaware Supreme Court has now reversed. “The Stock Purchase agreement here contested is not a merger, business combination or similar transaction,” the court wrote. “We hold that there is no reasonable possibility of success on the merits.”

Wachtell partner William Savitt, who represents Activision’s special committee, argued on behalf of all the defendants. Michael Hanrahan of Prickett Jones argued for the plaintiffs. Skadden partners Edward Welch and Edward Micheletti represented Activision.

This premium content is locked for
Litigation Daily subscribers only.

  • Subscribe now to enjoy unlimited access to Litigation Daily content,
  • 5 free articles* across the ALM Network every 30 days,
  • Exclusive access to other free ALM publications
  • And exclusive discounts on ALM events and publications.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2017 ALM Media Properties, LLC. All Rights Reserved.