[Jul 26, 2013, 08:29 am ET] - Share - Viewing Comments
Activision Blizzard announces
a buyback of its stock from French parent
Vivendi for a price tag of $5.83 billion, simultaneously announcing another
$2.34 billion in stock is being picked up by a group of investors led by
Activision CEO Bobby Kotick and Co-Chairman Brian Kelly, who are committing $100
million of their own pocket change to the kitty. This comes shortly after
that Vivendi was
planning on raiding Activision's cash stockpile to pay down some of its own
debt. The company will now be publically owned, with a 12% interest remaining with Vivendi.
Following the completion of the transaction, Activision
Blizzard will be an independent company with the majority of its shares owned by
the public. The Company will be led by Bobby Kotick as Chief Executive Officer
and Brian Kelly as Chairman. Vivendi will no longer be the majority shareholder,
but will retain a stake of 83 million shares or approximately 12%. ASAC II
LP—the investor group which, in addition to Kotick and Kelly, includes Davis
Advisors, Leonard Green & Partners, L.P., Tencent, as well as one of the largest
global institutional investors—will own a stake of approximately 24.9%.
Activision Blizzard expects that its new outstanding share count and capital
structure (which will include approximately $1.4 billion of net debt) will
result in expected pro forma 2013 earnings-per-share (EPS) accretion of between
18% and 29% on a GAAP basis and between 23% and 33% on a non-GAAP basis.
Bobby Kotick, CEO of Activision Blizzard, said, “These transactions together
represent a tremendous opportunity for Activision Blizzard and all its
shareholders, including Vivendi. 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. The transactions
announced today will allow us to take advantage of attractive financing markets
while still retaining more than $3 billion cash on hand to preserve financial
Mr. Kotick continued, “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. We are grateful for
Vivendi’s partnership through this period, and we look forward to their
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||Re: Activision Blizzard Buys Back Stock
||Jul 26, 2013, 20:01
ViRGE wrote on Jul 26, 2013, 11:59:
Jivaro wrote on Jul 26, 2013, 11:52:I believe you're correct. At first glance it looks like this blocks Vivendi's plan to raid the Activision wallet before it ever happened.
eRe4s3r wrote on Jul 26, 2013, 11:19:
But they get to keep their new billion $ debt.. haha... pwned by Vivendi in all ways possible....
I am sorry, I don't follow your logic. Can you explain that one to me? Vivendi can't raid them for money, now or in the future. New investors bought the stock. Those investors own that. They aren't in debt to themselves. Yes Vivendi gets the cash infusion of selling that stock, but I am not sure I follow how Acti-Blizz has absorbed any debt. Maybe I am missing something.
Well, one would hope that Vivendi is able to get out of debt with almost 6B in cash!?