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Vivendi Seeking Activision Buyers

There's more on recent rumors that Vivendi SA is considering selling off its stake in Activision Blizzard on Reuters, where they say that the French telecom giant had decided it will divest itself of the gaming unit. The report indicates that they are gauging interest from those with suitably deep pocketbooks: "Although a formal process has not started, bankers close to Vivendi are sounding out cash-rich trade players, including China's Tencent and U.S. duo Time Warner and Microsoft, as well as private-equity heavyweights KKR, Providence and Blackstone, banking sources said." Reuters got no comment responses about this from Microsoft and Time Warner. Thanks VG247.

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85 Replies. 5 pages. Viewing page 4.
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25. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 14:15 Scheherazade
 
Bosanac wrote on Jul 11, 2012, 11:22:
I don't get it.. Blizzard is a cash cow.. COD is a cash cow. Why call it liability?

Investors value business growth over business size.
A company that made 1 million last year and 10 million this year, is WAY more attractive than a company that made 100 million every year for the last N years.

Growth lets investors multiply their money.
Steady earnings just let you skim off some dividends.
Hence they can treat an extremely profitable "steady" business like it's worthless dirt.

-scheherazade
 
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24. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 14:06 Luke
 
Well maybe valve cooked the half life episode to long they could have had more money today if.....  
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23. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 14:03 Beamer
 
ASeven wrote on Jul 11, 2012, 12:43:
Parallax Abstraction wrote on Jul 11, 2012, 11:36:
ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.

That's not what that means necessarily. Liabilities in accounting terms just means debts. For example, your credit card bills, car loan, mortgage etc. are all what banks call "liabilities" because it's money you owe. From what I understand, Vivendi's in pretty heavy debt right now largely due to some of their other operations that aren't profitable and they're looking to sell Activision because it's one of the few major moneymakers they have and they want the cash infusion to prop up the rest of the company. Not to say that they maybe don't also want out of it because they see the AAA market declining but Moody's saying that Activision wants to reduce liabilities likely just means reduce debt. I just checked with my Chartered Accountant girlfriend and she said that's likely what they mean. Doesn't make a huge different to me either way, just food for thought.

EDIT: Dammit Beamer!

Yes, true, Vivendi is a skinking ship too but the Moody report says for Vivendi to get rid of liabilities in the financial accounting sense while at the same time damning the industry a bit by implying it no longer is a profitable venture for investors to go there. Hence adding 2 plus 2 together I reached the conclusion that Moody may mean Activision is a liability in both senses. They know that they cannot live much longer milking the same IPs and showing no evolution or innovation.

Other funny things have happened like Ricitello, EA CEO, selling all his EA stock recently and then confessing he's afraid of his job security to Pachter which he promptly spread to the media.

Even the CEOs know what's coming.

I'll get to due process in a second, let's get to your asinine comments. Ricitello sold all his stock? WHEN? He's acquired more than he's sold over the past 2 years.

And he's afraid of job security because the stock hasn't budged. Every CEO is afraid when that happens. His job is solely to maximize shareholder value, and if the stock isn't moving then he may not be doing that. Importantly, if the stock should be falling and it's not falling as quickly then he could be considered maximizing value, so that he's concerned about his performance shows that he thinks the problem can be viewed as him, not the company or the industry.

But he did not "sell all his EA stock," and you need to stop saying things like that.
 
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22. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:59 SimplyMonk
 
ASeven wrote on Jul 11, 2012, 13:08:
Though I too wouldn't mind Valve owning Actvision. It sure beats MS owning Activision that's for sure.

Never going to happen. They don't want the IPs and the company would never fit in Valve's corporate culture. Blizzard might, but even that would be a stretch as Blizzard also has their own unique policies.
 
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21. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:52 Mashiki Amiketo
 
theyarecomingforyou wrote on Jul 11, 2012, 13:40:
Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.
20-30% might be right down generous of Valve. Most of the big Japanese digital sites are in the 45-60% range.
 
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and it is always wrong."
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20. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:49 SimplyMonk
 
theyarecomingforyou wrote on Jul 11, 2012, 13:04:
...the first thing they'd do would be to kill the PC versions of all games.

Take this with a grain of salt, but MS is doing some heavy background work with Windows 8 to XBL to make the Next XBX and PC space almost identical in terms of platform integration. Does that mean that they are going to focus on the PC for game development? Most likely not, but they say they are making it so developing for the PC and the 360 are almost the exact same. In addition, I doubt they would take a multi-platform IP that sells record numbers and force it into just the 360. Bad PR to say the least. PC release as well would be a minimum.

This comment was edited on Jul 11, 2012, 14:00.
 
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19. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:44 ASeven
 
theyarecomingforyou wrote on Jul 11, 2012, 13:40:
ASeven wrote on Jul 11, 2012, 13:08:
I don't think Valve has the financial capability to buy those stocks. Or rather, they can buy the stocks but would more than likely require a massive loan and/or place many of their assets into mortgage in order to round up the necessary money.
Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.

Oh I'm not denying that, they probably have a fuckton of money, my point is that to buy those stocks you need more than a fuckton of money.
 
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18. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:40 theyarecomingforyou
 
ASeven wrote on Jul 11, 2012, 13:08:
I don't think Valve has the financial capability to buy those stocks. Or rather, they can buy the stocks but would more than likely require a massive loan and/or place many of their assets into mortgage in order to round up the necessary money.
Valve must make a huge amount. Assuming the major publishers negotiate better deals than the standard 30% cut, I'd imagine Valve is still taking 20% of the sale price for themselves and the operating costs will be a fraction of that. Given the number of years that Steam has been going - and doing incredibly well - I'd assume they have a decent stockpile of money.
 
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17. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:17 NegaDeath
 
I've got $2.50, I'll bid.


No wait a second........$2.61!
 
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16. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:08 ASeven
 
theyarecomingforyou wrote on Jul 11, 2012, 13:04:
Please let it be Valve that buys them.

Please let it be Valve that buys them.

Please let it be Valve that buys them.

Please... okay, you get my point. The LAST company I would want to buy Activision would be Microsoft, as the first thing they'd do would be to kill the PC versions of all games.

I don't think Valve has the financial capability to buy those stocks. Or rather, they can buy the stocks but would more than likely require a massive loan and/or place many of their assets into mortgage in order to round up the necessary money.

Though I too wouldn't mind Valve owning Actvision. It sure beats MS owning Activision that's for sure.
 
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15. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 13:04 theyarecomingforyou
 
Please let it be Valve that buys them.

Please let it be Valve that buys them.

Please let it be Valve that buys them.

Please... okay, you get my point. The LAST company I would want to buy Activision would be Microsoft, as the first thing they'd do would be to kill the PC versions of all games.
 
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14. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:57 ASeven
 
avianflu wrote on Jul 11, 2012, 12:52:
games sales are way down across the board and since the recession started. It is reasonable in that light to put Activision out there and see if there are any buyers willing to throw in a lot of coin.

It is not a firesale.

Larger companies do this all of the time and often there are corporate tax incentives, depending on how exactly the company is sold, to make a sale even more interesting to Vivendi's shareholders.


The big question is, how much will they net in this sale, if the people will buy the shares at the stock price, above it or below it. That alone should tell everything about what investors might think of the gaming market. If Microsoft is getting at it too, as rumors are saying they will, then part of the consolidation process of the industry begins there. Vivendi is the majority shareholder of Activision with 60% of Activision stock. If MS buys them all they technically get to own Activision.

The price offered to the stocks and who gets it will determine the health of the industry as perceived by investors. If an outsider to the industry offers to buy the shares at stock price or a little below it then people still believe the gaming market is profitable. If a gaming giant buys the stock, well, the consolidation begins because Activision will literally be a subsidiary of whoever purchases the stock.

Also Vivendi will be desperate to offload these stocks so they might accept an unfair price per stock.
 
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13. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:52 avianflu
 
games sales are way down across the board and since the recession started. It is reasonable in that light to put Activision out there and see if there are any buyers willing to throw in a lot of coin.

It is not a firesale.

Larger companies do this all of the time and often there are corporate tax incentives, depending on how exactly the company is sold, to make a sale even more interesting to Vivendi's shareholders.

 
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12. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:47 El Pit
 
Clever. Diablo 3 sold like sliced bread, but turned out to be a letdown for a lot (not all, of course) of gamers. Those gamers might think twice about buying a Blizzard game again. Plus: WoW is SLOWLY but steadily dying. They milked the cow, now they know it's time to either invest and give some freedom back to the developers and take some risk or sell it. They decided to pass it on, since risk could mean LOSS, and no company wants to risk any money these days. Play it safe, let some other people take the risk and then buy them or copy their ideas. That's the American/European/Asian way these days. *sigh*  
Consoles? I owned two: a Pong clone and an Atari 2600. And that's it.
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11. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:43 ASeven
 
Parallax Abstraction wrote on Jul 11, 2012, 11:36:
ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.

That's not what that means necessarily. Liabilities in accounting terms just means debts. For example, your credit card bills, car loan, mortgage etc. are all what banks call "liabilities" because it's money you owe. From what I understand, Vivendi's in pretty heavy debt right now largely due to some of their other operations that aren't profitable and they're looking to sell Activision because it's one of the few major moneymakers they have and they want the cash infusion to prop up the rest of the company. Not to say that they maybe don't also want out of it because they see the AAA market declining but Moody's saying that Activision wants to reduce liabilities likely just means reduce debt. I just checked with my Chartered Accountant girlfriend and she said that's likely what they mean. Doesn't make a huge different to me either way, just food for thought.

EDIT: Dammit Beamer!

Yes, true, Vivendi is a skinking ship too but the Moody report says for Vivendi to get rid of liabilities in the financial accounting sense while at the same time damning the industry a bit by implying it no longer is a profitable venture for investors to go there. Hence adding 2 plus 2 together I reached the conclusion that Moody may mean Activision is a liability in both senses. They know that they cannot live much longer milking the same IPs and showing no evolution or innovation.

Other funny things have happened like Ricitello, EA CEO, selling all his EA stock recently and then confessing he's afraid of his job security to Pachter which he promptly spread to the media.

Even the CEOs know what's coming.
 
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10. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:39 ASeven
 
Beamer wrote on Jul 11, 2012, 11:33:
ASeven wrote on Jul 11, 2012, 11:02:
liability.

This word does not mean what you think it means.



In general, though, Vivendi is a company that's having significant issues. Why are they seeking to offload Activision?
1) It's not core to their business. Yes, it makes money, but they're being pushed to focus on their core, which is not video games. This means offloading businesses that are distractions, even if profitable ones. Markets often push for this, which can have bad consequences, as offloading even a minimally profitable business, or minimally unprofitable one, can have huge repercussions
2) Activision, being profitable, shoudl be one of the easiest for them to offload, as there are people out there that want it
3) How do you get rid of liabilities? Paying them. How do you pay them without incurring new liabilities? Cash. How do you get cash? Selling something.

Please stop using "liability" if you don't understand the concept.


This is ironic because you're the one who said I didn't know what due process meant on the Kim Dotcom case and yet the courts are now all against the US DOJ because they didn't obey due process like I said and predicted, so who was the one who didn't know what due process means? Thats right, you. Then again you've proved time and again you don't know much of anything when you turn into apologist mode.

Anyway, liabilities mean that but they also mean exactly what I said. And having read the Moody advisory and how they classify the video game industry, "A shifting market for video games may limit Activisionís attraction to buyers. ", a phrase that pretty much is financial speak for saying the videogame industry is no longer attractive to investors and which Beamer here has deftly ignored lest his argument fell and he would be unable to rant to defend her precious industry heading for the crash, I can safely say Beamer that you really have no idea of the picture Moody painted. And yes, they do consider the industry a liability not only in your financial definition but in the usual definition of Do Not Invest.

 
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9. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 12:20 SimplyMonk
 
Time Warner picking up Acti-Blizz I don't think would change the playing field all that much. Time Warner has been making incremental studio purchases for awhile and their success has been decent with the whole Batman line. Nothing stellar. Picking up Acti-Blizz would make them a major player obviously.

Microsoft picking up Acti-Blizz has a lot more interesting potential. Although they might remain their own distinct element for a couple of years and just be business as usual, the possibilities that could arise from them acquiring Acti-Blizz's IPs are endless. Exclusivity is always in question but I would be curious to see if B.Net got merged with XBL in some fashion or a new spawn service would be born.

Not saying any of this would be better or worst. Just interesting.
 
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8. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 11:39 Kajetan
 
Bosanac wrote on Jul 11, 2012, 11:22:
I don't get it.. Blizzard is a cash cow.. COD is a cash cow. Why call it liability?
Because Blizz alone is not enough and Activision has no substitute when people start losing interest in CoD, which WILL happen. Activision is so dependent on CoD, its no longer healthy.
 
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7. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 11:36 Parallax Abstraction
 
ASeven wrote on Jul 11, 2012, 11:02:
Moody finds Activision a liability, and if they find the most financial solid publisher in gaming a liability they find the whole market a liability.

That's not what that means necessarily. Liabilities in accounting terms just means debts. For example, your credit card bills, car loan, mortgage etc. are all what banks call "liabilities" because it's money you owe. From what I understand, Vivendi's in pretty heavy debt right now largely due to some of their other operations that aren't profitable and they're looking to sell Activision because it's one of the few major moneymakers they have and they want the cash infusion to prop up the rest of the company. Not to say that they maybe don't also want out of it because they see the AAA market declining but Moody's saying that Activision wants to reduce liabilities likely just means reduce debt. I just checked with my Chartered Accountant girlfriend and she said that's likely what they mean. Doesn't make a huge different to me either way, just food for thought.

EDIT: Dammit Beamer!

This comment was edited on Jul 11, 2012, 11:42.
 
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6. Re: Vivendi Seeking Activision Buyers Jul 11, 2012, 11:33 Beamer
 
ASeven wrote on Jul 11, 2012, 11:02:
liability.

This word does not mean what you think it means.



In general, though, Vivendi is a company that's having significant issues. Why are they seeking to offload Activision?
1) It's not core to their business. Yes, it makes money, but they're being pushed to focus on their core, which is not video games. This means offloading businesses that are distractions, even if profitable ones. Markets often push for this, which can have bad consequences, as offloading even a minimally profitable business, or minimally unprofitable one, can have huge repercussions
2) Activision, being profitable, shoudl be one of the easiest for them to offload, as there are people out there that want it
3) How do you get rid of liabilities? Paying them. How do you pay them without incurring new liabilities? Cash. How do you get cash? Selling something.

Please stop using "liability" if you don't understand the concept.

 
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