Activision Blizzard planning to buy itself back from Vivendi – Video Games Update
There have been reports that Activision Blizzard is considering buying itself back from the French conglomerate Vivendi which currently has a majority stake in the publisher.
Vivendi, a French company that took over Activision Blizzard in 2008 has recently announced that it wishes to sell off the giant publisher. It was eyeing Microsoft, Take-Two, Time Warner, Disney, Nexon and Tencent as potential buyers but so far there has
been no development. Microsoft, Take-Two, Time Warner and Disney have flat out refused the offer since they are not interested in what the publisher adds to their portfolio, Nexon and Tencent seem interested however can’t afford a cash purchase.
Vivendi’s 61 percent majority share in Activision Blizzard is currently estimated to be worth $8.1 billion and the French conglomerate is only willing to sell off the publisher for a single cash payment ruling out many interested parties. Vivendi had previously
stated that if it couldn’t find a suitable buyer, it will sell off its stake in the open market.
There have been reports that Vivendi has also given Activision Blizzard an option to buy back their own stock if they can manage to raise the capital. Activision Blizzard is estimated to have $3 billion in cash available with minimal debt. The company is
trying to raise the remaining $5 billion by borrowing funds or by financing it through private equity through additional investors.
Vivendi has hired Barclays and Goldman Sachs Group Inc. to aid and facilitate the sale of the giant publisher. The reason Vivendi is aggressively trying to sell off Activision Blizzard is to offset its negative credit rating with financial services agencies.
Gamers are speculating on the changes that will occur if Activision Blizzard buys itself back through loans as that might force to publisher to downsize and close many of its development studios.
The publisher is likely to lose its top spot as the world’s largest to its main rival publisher Electronic Arts. Raising private equity might also be a problem for Activision Blizzard as not many investors will be willing to be a part of the company. Most
analysts are claiming that Activision Blizzard has peaked and is now on its way down.
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