Activision Blizzard (NASDAQ:ATVI) will repurchase 429 million shares held by Vivendi for $5.83 billion and will finance the transaction with $1.2 billion equity and loans of $4.6 billion, according to a company statement.
Bobby Kotick, Activision Blizzard chief executive officer and his partners, including co-chairman Brian Kelly and Chinese group Tencent Holdings created an investment vehicle, ASAC II LP, through which they will buy 172 million shares for $2.34 billion at $13.60 a share.
The price is 10% below the Activision Blizzard exchange quotation at the end of the meeting on Thursday. The company will therefore become independent after five years in Vivendi portfolio.
Kotick led consortium will hold 25% stake in the company after the transaction, and Vivendi will retain 12% of the shares.
Vivendi since last year was considering ways to extract money from Activision Blizzard, considering taking the company’s significant cash through a special dividend or a share repurchase. Vivendi failed to find a buyer for its stake of 61% stake in Activision, under a restructuring program designed to revitalize the share price and reposition itself in a highly competitive market. The French group recently announced that is in talks for the sale of Maroc Telecom to Emirates Telecommunications for €4.2 billion ($5.7 billion), aimed at focusing its business on media industry activities.
Activision Blizzard shares climbed 43% from beginning of the year until yesterday. Its shares went up 15% since yesterday to $17.70, giving the company a market capitalization of $19.50 billion.
Activision Blizzard is one of the largest video game developers in the world, with titles that marked generations, such as two series of the StarCraft, Call of Duty franchise, Diablo and Warcraft. The company, which ended the first quarter of this year with liquidity of $4.3 billion, is present with operations in 17 countries worldwide, including Canada, USA, UK, France, Germany, Australia, India, China, South Korea and Taiwan.
Blizzard Entertainment is the video games development division of the Activision Blizzard, founded in 1991 in the U.S. state of California. Originally a provider for other video game developers, Blizzard began working on their own titles in 1993. In the late ’90s, Blizzard has become a name enshrined on the video-gaming market, after the launching games like Star Craft, Warcraft, or Diablo.
In 1994, Blizzard was bought by educational software distributor Davidson & Associates, which was later acquired by the French multinational company Vivendi. After the successful merger of Vivendi’s gaming operations with Activision in the summer of 2008, Blizzard has become part of Activision Blizzard division.
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