Vivendi May Be About To Squeeze Activision Blizzard For Billions

Karloff

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Vivendi May Be About To Squeeze Activision Blizzard For Billions



The rule that previously constrained Vivendi's borrowing efforts has expired.

How much does Vivendi want to force Activision Blizzard to borrow [http://www.escapistmagazine.com/news/view/125723-Vivendi-May-Siphon-Funds-From-Activision-Blizzard], in order to shore up its own struggling telecom subsidiaries? Somewhere around the $5 billion mark seems a likely scenario, but that has yet to be decided; the 22nd July Vivendi board meeting will thrash out the finer details, assuming that there will be finer details to thrash. In the ideal, Vivendi would like Activision to pay out a massive cash dividend to shareholders which, since Vivendi holds 61% of Activision's stock, will effectively be a straight cash injection into Vivendi's anemic bottom line. Until fairly recently Vivendi couldn't force Activision to do anything without the approval of three out of five independent Activision shareholders, but that deal, signed when Vivendi bought Activision out, expired earlier this month. Now Activision is at Vivendi's mercy, and while there have been indications that Activision's Bobby Kotick would like very much to buy his way out of this position, there's been no welcome on Vivendi's part for that move.

Vivendi's desire for cash has a lot to do with its reliance on telecoms units as assets, many of which are suffering from increased competition and loss of profit. It has been trying to sell off its telecom businesses, with some success, but those deals are still in negotiation. If the Vivendi motion - the details of which have yet to be made public - passes, then a second, Activision meeting later this week will be pushed to confirm the deal.

It's unlikely that Kotick and Activision will go quietly into that good debt, though it may be unavoidable. Talks of an Activision buyback have gone nowhere, at least for the moment. "We think that reports of the two sides failing to reach agreement on price are close to the mark," analyst Michael Pachter has said in the past, but the question remains: would Vivendi accept any offer Kotick might make, or would it rather keep a stranglehold on its golden goose?

Source: Reuters [http://www.reuters.com/article/2013/07/22/us-vivendi-activision-idUSBRE96L07E20130722]


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Ed130 The Vanguard

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Sep 10, 2008
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So, money grubbing prick is being strongarmed by his superiors into taking on debt?

I can see this working out real well for everyone.
/sarcasm
 

Dr.Awkward

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hmmm... I'm wondering if Vivendi's goal is to get all this cash, buy themselves off of Activision Blizzard, and strike out on their own? It might explain Vivendi's lack of games or announcements for the last few months...
 

Pandaman1911

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Jan 3, 2011
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While I dislike ActiBlizz as much as the next guy, this just makes me horribly sad and fucking mad as hell at the same time. From my point of view, Vivendi is just doing the equivalent of a Yoshi double-jump, using one company's momentum to keep itself afloat a few precious seconds longer, while the other is sent to a fiery doom. Say what you will about Activision, at least they make goddamn video games.
 

Colt47

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This entire situation is just sour. I understand Vivendi is in dire straits with their telecom situation, but their current plan would also heavily cripple a perfectly healthy game publisher.
 

TiberiusEsuriens

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Viva la Activision Blizzard.

Seriously, if the giant falls, it should be because they finally do something so stupid the customers stop supporting them, not because of corporate politics.

I think if Kotick is evil, he'd be Darth Vader and Vivendi be the Emperor. Who would you root for?
 

King Kazma

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I'd like to know who buys stocks without having them pay a dividend. If you're investing for the long term, thats what you want. But I don't know when this deal was made, nor how long the terms were on no dividends without independents approval.
 

gigastar

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Sep 13, 2010
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Dr.Awkward said:
hmmm... I'm wondering if Vivendi's goal is to get all this cash, buy themselves off of Activision Blizzard, and strike out on their own? It might explain Vivendi's lack of games or announcements for the last few months...
Vivendi own Activision, its Activision whom seemingly want to get away from Vivendi.
 

fix-the-spade

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Dr.Awkward said:
hmmm... I'm wondering if Vivendi's goal is to get all this cash, buy themselves off of Activision Blizzard, and strike out on their own?
No, they're trying to load up Actiblizz with their other companies' debts, because nobody will lend those other failing companies capital to invest.

They're hoping that Activision Blizzard will continue the upward trend the two companies have had in the last decade, they are literally betting the company on it. Despite evidence the last couple of years that both Activision and Blizzard are plateauing out and may start going back down soon, they're still the best Vivendi has got and thanks to the previous contract they have little in the way of existing debt. If Actiblizz goes south Vivendi can declare it bankrupt, effectively wiping the debt and giving them some hugely profitable IPs/studios to sell at gigantic prices.

The very last thing Vivendi wants is to lose control of Actiblizz, even in exchange for $5billion as Vivendi will burn through that in no time at all with the way it's other companies are bleeding money. Actiblizz makes profit, Vivendi need that no matter how much the other shareholders offer for a buyout.

It's a weird situation where Kotick is the 'good' guy, then again Actiblizz getting saddled with an impossible situation then taken apart would be delicious irony given the way Activision have behaved with their studios under Kotick's rule.
 

aramisx

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Pandaman1911 said:
While I dislike ActiBlizz as much as the next guy, this just makes me horribly sad and fucking mad as hell at the same time. From my point of view, Vivendi is just doing the equivalent of a Yoshi double-jump, using one company's momentum to keep itself afloat a few precious seconds longer, while the other is sent to a fiery doom. Say what you will about Activision, at least they make goddamn video games.
Pretty much states my feelings about it. I'm really curious to see what the trickle down effect will be on the individual groups. Blizzard has already been speeding up production on its franchises and their individual content patches/expansions and it's had some serious effects. Too soon means quicker burnout (because eventually you get to the point where there's an overwhelming and off-putting amount of content) and down the road less players because they're bored. Definitely a double-edged sword.
 

MCerberus

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Yar! This be great for the corporate raiders! These scurvy dogs been getting away with running a healthy profitable company! Now it be time to legally take ALL THEIR BOOTY! Logic be damned, short term profit be thars!
 

Aiddon_v1legacy

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Nov 19, 2009
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and suddenly all that optimism about the next generation of gaming is depleting. Furthermore, it's kind of fitting how a company like Activision, who has ruthlessly cast aside tons of developers, is now being used as little more than a tool for another, bigger entity. We'll see how this goes.
 

Callate

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Dec 5, 2008
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Wow. I never thought I'd feel sympathy for Activision, but no otherwise healthy company deserves to see its financial fate decided by a bunch of a$$#@%@$' desires for an utterly undeserved and unwarranted pay-out.
 

Vivi22

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Pandaman1911 said:
While I dislike ActiBlizz as much as the next guy, this just makes me horribly sad and fucking mad as hell at the same time. From my point of view, Vivendi is just doing the equivalent of a Yoshi double-jump, using one company's momentum to keep itself afloat a few precious seconds longer, while the other is sent to a fiery doom. Say what you will about Activision, at least they make goddamn video games.
Pretty much. And while they are the majority shareholder, it bothers me immensely that they could be allowed to do something which could very well harm ActiBlizz's business at the expense of every other shareholder of that company.
 

RJ 17

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Nov 27, 2011
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Pretty much the only good thing I can say about Acti-Blizz is they can make some damn fine cutscene cinematics (Blizzard in particular), and while part of me is happy to see them get kicked right in the balls for once, the other part just sighs and facepalms at this blatant act of corporate politics and greed. Seriously, I don't know much about this deal that expired, but apparently Vivendi was chomping at the bit, just counting the days until it expires. I imagine some guy sitting there with a watch in one hand and a phone in the other so literally the moment that old deal was done he could call up Acti-Blizz and be like "GIMME DA MONIES!!!!"
 

Renegade-pizza

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Jack_in_the_green said:
"The Lannisters send their regards", Bobby... :p
Laughed my ass off, then cried at the memory.

Blizzard won't hand over a chunk of their Golden Mountain of Diamonds without a fight!!