Activision Blizzard today announced that they are buying back 429 million shares that is worth $5.38 billion from Vivendi over the next several months. This announcement comes after Wall Street Journal reported that Vivendi is looking for alternatives in holding onto Activision Blizzard as they can’t afford to hold the company’s price value. Activision Blizzard is currently the largest video game publisher.
In addition to buying back the stocks, the Company’s CEO and Co-Chairman will independently be buying over 172 million Activision Blizzard shares from Vivendi – both of them have personally invested over $100 million combined already.
In a simultaneous transaction, ASAC II LP, an investment vehicle led by Activision Blizzard CEO Bobby Kotick and Co-Chairman Brian Kelly, to which they have personally committed $100 million combined, separately will purchase approximately 172 million Company shares from Vivendi for approximately $2.34 billion in cash, or $13.60 per share.
After this major transaction is complete, Activision Blizzard will be an independent company and led by CEO Bobby Kotick and Chairman Brian Kelly. Vivendi will still have some shares in the company, but the public will own the higher stake and amount.
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.”
Even though the company is spending over $8 billon on this deal, they expect to have over $3 billion on hand to continue to expand their portfolio and be the leader in video game publishing. Activision Blizzard’s current portfolio includes the Call of Duty franchise, Diablo, World of Warcraft, and many others.
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.”
Activision also confirmed that their largest partner TenCent in China is contributing by buying stocks as well to assist this major transaction. TenCent is assisting Activision in China by publishing and marketing the Call of Duty Online for China.
In addition, Activision Blizzard have given a preliminary results regarding their Q2 results.The company has reported a revenue of $1.05 billion, a higher number than originally expected by many analysts. Skylanders continues to be #1 selling game, with Call of Duty coming in at #2 in North America and Europe. The company expects to reveal full information regarding Q2 in their financial call on August 1st at 5pm ET (2pm PT).