Activision Blizzard to Buy Back Most of Vivendi's Controlling Stake in $5.8 Billion Deal

11:46 PM PST 07/25/2013 by Georg Szalai
Tony Avelar/Bloomberg via Getty Images
Bobby Kotick

UPDATED: Also, an investment vehicle led by Activision CEO Bobby Kotick and co-chairman Brian Kelly will buy a piece for more than $2.3 billion, leaving Vivendi with a 12 percent share.

Video game giant Activision Blizzard said late Thursday that it and an investor group led by its top executives have reached an agreement to buy the majority of the stake owned by controlling shareholder Vivendi in two deals worth nearly $8.2 billion.

Activision itself will buy about 429 million company shares for approximately $5.83 billion in cash. At the same time, an investment vehicle led by Activision CEO Bobby Kotick and co-chairman Brian Kelly, to which they have personally committed $100 million combined, will buy about 172 million shares, or a stake of nearly 25 percent, for some $2.34 billion in cash.

The deals come at a price tag of $13.60 per share. Following the transaction, Activision Blizzard, best known for its Call of Duty games, will be an independent company with the majority of its shares owned by the public.

Vivendi will retain 83 million shares, about 12 percent of the company, compared with its current stake of 61 percent. It had acquired it in 2008 as part of the combination between Activision and Vivendi's video gaming unit.

Activision will continue be led by Kotick and Kelly. Kotick will serve as CEO, Kelly as chairman. 

The investor group that they are part of also includes Davis Advisors, Leonard Green & Partners and Chinese investment holding company Tencent as well as a large but unnamed global institutional investor.

"These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi," said Kotick. "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."

He added: "Our successful combination with Blizzard Entertainment five years ago brought together some of the best creative and business talent in the industry and some of the most beloved entertainment franchises in the world, including Call of Duty and World of Warcraft. Since that time, we have generated over $5.4 billion in operating cash flow and returned more than $4 billion of that to shareholders via buybacks and dividends."

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

 

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