Considering their the world’s largest video game publisher it’s almost a steal…
After purchasing back $8.2 Billion worth of shares from Vivendi, Activision Blizzard is now a properly independent company. A majority of the company is now owned by public shareholders. From CEO Bobby Kotick:
“With the completion of this transaction we open a new chapter in the history of Activision Blizzard. We expect immediate shareholder benefits in the form of earnings-per-share accretion and strategic and operational independence. Our audiences and our incredibly talented employees around the world will benefit from a focused commitment to the creation of great games. Our shareholders and debt holders will have the benefit of an energized, invested, deeply committed management team focused on generating long-term, superior returns and effectively managing our capital structure.”
After trying (and failing) again this past May to offload Activision Blizzard, it would appear Vivendi finally found the perfect buyer. It never completely made sense to me why exactly Vivendi wanted to part with a profitable business, but now investors have less potential uncertainty to worry about now that A/B is a solo venture. With Skylanders: Swapforce, COD: Ghosts, and Destiny on the horizon I think shareholders will be in for a pretty decent year.
Full PR after the jump.
Activision Blizzard and Investor Group Complete Purchase of Company Shares from Vivendi
Newly Independent Company Now Majority Owned by Public Shareholders
SANTA MONICA, Calif.–(BUSINESS WIRE)– Activision Blizzard, Inc. (Nasdaq: ATVI), a global leader in interactive entertainment, announced today that it had successfully completed its previously announced acquisition of approximately 429 million company shares and certain tax attributes from Vivendi (Euronext Paris: VIV) for approximately $5.83 billion, or $13.60 per share in cash. ASAC II LP, an investment vehicle led by Activision Blizzard CEO Bobby Kotick and Chairman Brian Kelly, has also completed its purchase of approximately 172 million company shares from Vivendi for approximately $2.34 billion in cash, or $13.60 per share, in a separate transaction.
The shares Activision Blizzard purchased in the transaction will no longer be treated as outstanding, leaving the majority of the remaining 690 million shares in the hands of public shareholders. With the closing of the transaction, ASAC II LP-the investor group which, in addition to Kotick and Kelly, includes Davis Advisors, Leonard Green & Partners, L.P., Tencent, and one of the world’s largest global institutional investors-now owns approximately 24.7% of the Company. Vivendi has retained 83 million shares, an approximate 12% stake in the Company.
Activision’s stock purchase was financed with a combination of approximately $1.2 billion of domestic cash on hand and recently issued debt, including $1.5 billion of 5.625% senior notes due 2021, $750 million of 6.125% senior notes due 2024, and a $2.5 billion seven-year term loan facility. The entire $4.75 billion of debt financing has a weighted average annual interest rate of less than 5%.
“With the completion of this transaction we open a new chapter in the history of Activision Blizzard,” Mr. Kotick said. “We expect immediate shareholder benefits in the form of earnings-per-share accretion and strategic and operational independence. Our audiences and our incredibly talented employees around the world will benefit from a focused commitment to the creation of great games. Our shareholders and debt holders will have the benefit of an energized, invested, deeply committed management team focused on generating long-term, superior returns and effectively managing our capital structure.”
Activision Blizzard received committed financing for the transaction from Bank of America Merrill Lynch and J.P. Morgan. J.P. Morgan Securities LLC acted as Activision Blizzard’s sole financial advisor for the transaction and Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to the Company. A special committee of independent directors formed to represent the Company in negotiating and evaluating the transactions worked with Centerview Partners as its financial advisor and Wachtell, Lipton, Rosen & Katz as its legal counsel. ASAC II LP worked with financial advisor Allen & Company LLC and its legal counsel is Sullivan & Cromwell LLP.
About Activision Blizzard
Activision Blizzard, Inc. is the world’s largest and most profitable independent interactive entertainment publishing company. It develops and publishes some of the most successful and beloved entertainment franchises in any medium, including Call of Duty, World of Warcraft, Skylanders, and Diablo®.
Headquartered in Santa Monica California, it maintains operations throughout the United States, Europe, and Asia. Activision Blizzard develops and publishes games on all leading interactive platforms and its games are available in most countries around the world. More information about Activision Blizzard and its products can be found on the company’s website, www.activisionblizzard.com.