Activision Blizzard buys back stake from Vivendi in $8.17-bn deal
26 Jul 2013
Activision Blizzard Inc, the world's largest and most profitable gaming company and a management group will buy itself back from French conglomerate Vivendi in an $8.17 billion deal.
The California-based interactive entertainment company will buy back around 429 million shares from Vivendi for $13.60 per share or $5.83 billion, and investor group led by CEO Bobby Kotick and co-chairman Brian Kelly will separately buy approximately 172 million shares from Vivendi for $2.34 billion.
After the deak closure, Activision Blizzard will be run as independent company with the majority of its shares owned by the public. The company will be led by Bobby Kotick as CEO and Brian Kelly as chairman.
Vivendi will retain a 12-per cent stake and investor group ASAC II LP will continue to hold around 24.9 per cent.
Activision Blizzard, whose games include Call of Duty and World of Warcraft, will fund the acquisition with the combination of approximately $1.2 billion of cash on hand and approximately $4.6 billion of debt accessed through the capital markets and bank financing.
The company said that it has received committed financing for the transaction from Bank of America Merrill Lynch and J.P. Morgan and expects the deal to close by the end September 2013.
Vivendi has been under pressure from activist investor Vincent Bollore to restructure the company by spinning off its entertainment holdings, which include Activision Blizzard and French TV group Canal Plus.
Since the past year, the Paris-based company had been canvassing for a deal for its stake in Activision Blizzard and had approached buyers like Walt Disney Co, Microsoft Corp, China's Tencent Holdings and Japan's Nexon Co.
This week, it announced that it has entered into exclusive talks to sell its majority stake in Maroc Telecom to Abu Dhabi's Etisalat for €4.2 billion ($5.54 billion) in cash, (See: Vivendi in talks to sell stake in Maroc Telecom to Etisalat for $5.54 bn) and is also in the process of seeking a buyer for its Brazilian telecom unit GVT.http://www.domain-b.com/industry/telecom/20130723_etisalat.html
Santa Monica, California-based Activision Blizzard, formed through the $18.8-billion merger between Activision and Vivendi Games in 2007, is the largest video-game publisher with blockbuster games that include Call of Duty and World of War Craft.
It is the only publisher with leading market positions across all categories of the video game industry.
Its portfolio includes best-selling video games such as Spider-Man, X-Men, James Bond and Transformers, leading franchises such as Spyro and Blizzard Entertainment's StarCraft, and Warcraft franchises.
Activision Blizzard has operations in the US, Canada, the UK, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Australia, India, China, South Korea and Taiwan.
The Nasdaq-listed company has a market cap of $17 billion, and posted a net profit of $1.1 billion in 2012 on revenues of $4.8 billion.