Story by Brenna Hillier
Fri, Jul 26, 2013 | 05:34 BST
No publisher in the world is big enough to buy Activision Blizzard – except Activision Blizzard.
In a surprise twist to Vivendi’s ongoing efforts to leverage its 61% stake in Activision Blizzard, the twin publisher has announced it will purchase its own stock from its parent company.
Activision Blizzard has arranged to buy back around 429 million shares and “certain tax attributes” for $5.83 Billion to effectively sever its conneciton to the French-based conglomerate.
In addition to Activision Blizzard’s purchase, ASAC II LP – which is led by CEO Bobby Kotick and Co-Chairman Brian Kelly, who fronted $100 million of their personal funds – will secure a further 172 million shares for $2.34 billion in cash, or $13.60 per share.
Once the dela has been processed, Activision Blizzard will be an independent company, answerable in the majority to its shareholders.
Vivendi will retain 83 million shares, a stake of around 12%. ASAC II LP will own around 24.9%.
“These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi,” Kotick said.
“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.”
Activision Blizzard is handing over $1.2 billion of domestic cash on hand and approximately $4.6 billion of debt proceeds, net of fees and upfront interest to fund the deal. It will retain $3 billion in cash on hand.
The shares are valued at $13.60 each, but expected to rise in value as a result of the restructuring. The deal should be complete by September.
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