Activision Blizzard announced that it will purchase approximately 601 million shares from Vivendi to the tune of $8.2 billion with the help of outside investments. There had been some talk that Vivendi would force Activision into giving Vivendi a special dividend of $2 - $3 billion to raise funds for paying down debt. Vivendi currently holds a controlling stake in the Call of Duty and World of Warcraft publishers, but this plan would make Activision an independent entity again.
The plan is made possible through an investor group led by CEO Bobby Kotick and Co-Chairman Brian Kelly (who have "personally" committed $100 million) to buy 172 million shares from Vivendi for approximately $2.34 billion in cash. That will be handled by ASAC II LP, an investor group which includes Kotick and Kelly, Davis Advisors, Leonard Green & Partners, L.P., and Tencent. The investment group will hold a stake of approximately 24.9 percent. Vivendi will still own 84 million shares, and reduce its stake to 12 percent. Activision Blizzard will buy 429 million shares from Vivendi for $5.83 billion.
The transaction is expected to close by the end of September, subject to customary closing conditions.
"These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi," Bobby Kotick, CEO of Activision Blizzard, 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. 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."
"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," he added.
You can read the press release announcing the deal here.