$8.2 Billion Activision Vivendi Deal Cleared By Delaware Court

The maker of ‘Call of Duty’ is clear to proceed in its $8.2B buyback deal with Vivendi.

Activision Blizzard can continue with its proposed $8.2B buyout of Vivendi’s majority stake in the company, a deal that will give the video game publisher independence from the French conglomerate.

The deal consists of a $5.83B share buyback as well as the purchase of $2.34B in company stock by a coalition of investors spearheaded by CEO Bobby Kotick which includes Chinese game company Tencent, the publisher of League of Legends.

Activision had appealed an earlier decision by Delaware Chancery Court Judge J. Travis Laster to require a shareholder vote on the proceeding, after a shareholder sued to stop the deal.

That decision was overruled today.

“There is no reasonable possibility of success on the merits,” Chief Justice Myron Steele wrote of the lower court’s decision. “The Stock Purchase Agreement here contested is not a merger, business combination or similar transaction.

“There is almost universal belief that this is a good deal for the stockholders,” Steele added.

The final sale will reduce Vivendi’s stake in the company to just 12 percent, while the majority stake of about 25 percent would go to the investor group led by Kotick.

Vivendi expects to complete the deal on or around October 15th.

Prior to the buyback, Vivendi had consideredforcing a $3B dividend from Activision, exercising its ownership rights to drain the video game publisher’s coffers to pay down the French company’s debts.

The original court ruling blocked the buyout deal indefinitely and according to Activision attorneys, minority shareholders stood to lose as much as $1B if the deal remained blocked.

According to analyst Michael Pachter, Activision’s independence from Vivendi will put the game publisher “in a position to be more financially flexible.”

“The company communicates clearly, executes well, and its management appears to truly understand how to make money,” Pachter noted.

“These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi,” Activision CEO Bobby Kotick said when the deal was first announced.

“We should emerge even stronger-an independent company with a best-in-class franchise portfolio and the focus and flexibility to drive long-term shareholder value and expand our leadership position as one of the world’s most important entertainment companies.”

Activision shares are up 4.73% on the news, hovering at $17.05.

The company has two major game releases coming out in the near future: next week’s launch of Skylanders: Swap Force, and the November release ofCall of Duty: Ghosts.