updated 03:37 pm EDT, Fri July 26, 2013
Move will ditch French publisher, leave majority of shares in public hands
Videogame developer and publisher Activision Blizzard announced yesterday that is has reached an agreement for a total of $8.17 billion with French media conglomerate Vivendi, effectively buying itself out of its partnership. Activision Blizzard is contributing $5.83 billion at $13.60 per share, with Blizzard CEO Bobby Kotick and Co-Chairman Brian Kelley purchasing 172 million company shares for $2.34 billion. Following the completion of the transaction, Activision Blizzard will be an independent company again, with the majority of its shares owned by the public.
Activision Blizzard will fund the acquisition with $1.2 billion in cash on hand and approximately $4.6 billion of debt proceeds. The company has received committed financing for the transaction from Bank of America, Merrill Lynch and J.P. Morgan. The transaction is expected to close by the end of September 2013, subject to conditions and regulatory approval.
Bobby Kotick, CEO of Activision Blizzard, said that "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."
Kotick continued, adding that "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."
For the quarter, Activision Blizzard was the number one independent publisher in both North America and Europe. Additionally, Blizzard Entertainment's World of Warcraft remained the world's top subscription-based MMORPG, ending the quarter with approximately 7.7 million subscribers.