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Activision Blizzard Buys Back Stock

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 reports 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. Here's word:

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 stability.”

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 continued support.”

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18. Re: Activision Blizzard Buys Back Stock Jul 26, 2013, 12:36 Kalthorn
 
Not that I can tell what the end of it means, but doesn't paragraph two explicitly state that they are still going to start this new arrangement off with $1.x billion in debt?  
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