M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, October 11, 2013

Poor Prognosticator

OK, so one reason number why I no longer try to call cases before judges hand down their opinion: I'm usually wrong!  Not always, but often enough that people will start to doubt my credibility if I do it too often.  Thank goodness I didn't try to call the Activision/Blizzard appeal that was heard by the Delaware Supreme Court yesterday.  I missed the hearings, though I had the opportunity to watch them via our friends at Courtroom View Network.

In any event, the issue on appeal was whether the Vice Chancellor erred when he issued a preliminary injunction requiring a shareholder vote to approve a transaction involving Activision and Vivendi, its controlling shareholder.   The certificate of incorporation (9.1) required that the majority of the minority of unaffiliated shareholders approved "any merger,  business combination, or similar transaction" involving Activision and Vivendi.  OK, so this wasn't a merger. It was a series of transactions involving a sale of Vivendi's stock in Activision back to the company and to managers.  In effect, the transactions will change control of the transaction from one controller to another.   

To me, that looks like a "similar transaction" but apparently, that's just me.  The court went the other way and overturned the Vice Chancellor's order on the grounds that the transaction is not the kind that would not fall under the protection of 9.1.  Hmm.  For what it's worth, here's the order. Oh well.  There you go.



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