Vivendi Reconsiders Activision Sale

Andy Chalk

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Nov 12, 2002
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Vivendi Reconsiders Activision Sale


Difficulty unloading Activision may force Vivendi to raise cash by selling another one of its properties instead.

Rumors of a potential sale of publishing giant Activision first came to light [http://www.escapistmagazine.com/news/view/117782-Vivendi-Ponders-Activision-Sale] in early June, when it was reported that Vivendi SA, which holds a 61 percent interest in the company, was anxious to offload it in order to raise some much-needed cash and boost its sliding share price. The desire to sell has gone from rumor to accepted fact over the past month or so, bolstered by reports yesterday that banking giants Barclays and Goldman Sachs had been brought in to help broker a deal.

The trouble for Vivendi is that nobody appears particularly interested in taking on Activision, which currently boasts a market value of roughly $8.3 billion. Vivendi was originally seeking a 25 percent premium over that value but when companies including Time Warner, Microsoft, Apple and Facebook all took a pass, it said it would consider going as low as a 12 percent premium, which still wasn't enough to attract serious interest.

Also on the table is the possibility of Activision itself buying out Vivendi's interest. Activision has hired J.P. Morgan and Allen & Co. to provide guidance on a potential buyout, but whether it can put together the funds needed to make the deal happen is a question mark. "Vivendi was hoping to get at least a bidder to challenge Activision's management and get a decent premium," a source said. "But it didn't happen so now they are considering other options to raise cash and maintain the rating in the short term."

At this point, the deal appears to be on the shelf. "Vivendi will now think about its options on Activision and take a decision in the coming months," the source said. Instead, the company is now reportedly considering a sale of Brazilian telecom giant GVT, which has a higher market valuation than Activision - $10.42 billion - but may be more likely to bring the price that Vivendi wants. Until recently, GVT was considered a "must-keep asset," but the inability to find buyers for Activision coupled with anxiousness to reduce its current $17.2 billion debt load means the option "is no longer taboo and is now being considered internally."

Source: Reuters [http://www.reuters.com/article/2012/07/19/us-vivendi-gvt-idUSBRE86I10620120719]


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fix-the-spade

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Feb 25, 2008
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Not surprised nobody wants Acti-bliz.

No successful new IPs for many, many years now, steadily narrowing catalgoue, even they have to push it and define Black Ops as a 'new' brand. Four point eight billion dollars income in 2010 but somehow less than 10% profit and never any kind of dividend. Stagnant share prices...

Vivendi must be discovering what I did, any investment into Activision is a big money black hole, only way to get anything from their shares is sell 'em!
 

Bvenged

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Sep 4, 2009
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So, if Vivendi sell Activision, does that mean there's a split with Activision Blizzard?
 

Traun

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Jan 31, 2009
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Not surprising, you have a better chance at roulette than turning a profit from shares in gaming companies, even if it is Activision.
 

octafish

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I wonder if a self owned Activision would be bolder or just as conservative as they are now? One could only hope that there may be a chance of a management reshuffle.
 

1337mokro

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You know, way back in the day Activision was actually one of my biggest landmarks in gaming. It was one of the first, or maybe even THE first company to produce third party games. It was founded by 4 ex-Atari employees who were fed up with being paid peanuts to make games.

So they branched off and formed the company that would eventually lead to the death of the videogame market at that time.

Maybe it will be a landmark in gaming once again when Kotick bails after the sale and they stop making the same game each year and just releasing movie licensed titles.
 

lancar

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*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?
 
Nov 28, 2007
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lancar said:
*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?
Basically, Vivendi was looking at selling off Activision in order to make some quick money to raise stock prices. However, no one seems interested in owning Activision. A fact I find hilarious.
 

lancar

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thebobmaster said:
lancar said:
*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?
Basically, Vivendi was looking at selling off Activision in order to make some quick money to raise stock prices. However, no one seems interested in owning Activision. A fact I find hilarious.
That IS kinda funny :)
 

BeerTent

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May 8, 2011
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DVS BSTrD said:
You wanna cut your debt load? Start with your RIDICULOUS Management bonuses and compensations. Trust me it will save you SO much.
Off topic, but... This sounds an awful lot like Nova Scotia Power here.
 

Neofishie

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Sep 23, 2010
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Says a lot when no one is willing to buy the owners of CoD IP. I mean, I know Activison has got problems, but they're enough to not want outsiders to own CoD?

If that doesn't show you just how risky the games industry is, nothing will.
 

Mekado

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Mar 20, 2009
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CardinalPiggles said:
Activision is in a $17billion debt situation? Howdafuq?
It's not Activision but Vivendi SA (Blizz-Activision's 61% owners) that's 17BN$ in debt.

Keep in mind this is a huge media conglomerate, 17BN$ isn't peanuts but not the end of the world for them either. They have a total worth around 70BN$ , they're also owners of other known brands like Universal Music.


On topic i'm not surprised nobody wants to buy it, especially at a premium.Like someone said before they have no new ip's for a while now and while WoW is a golden cash cow, it's been on a slow decline for years now, who seriously wants to pick up something when the "peak" has come and gone?

EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.
 

Mekado

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kajinking said:
So Activision is fine it's just that they're being sold off to cover some dept?
Yeah, they're still hauling in some money, just not as much as Vivendi thought. It's the first asset they wanted to sell to make some cold hard cash so i'm betting it's the "least" successful.
 

praetor_alpha

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Mar 4, 2010
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Mekado said:
EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.
I would be fine with it. It's extremely easy to create a successful game development studio, and there's nothing to suggest that an EActiblizzavision would change that.
 

idarkphoenixi

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May 2, 2011
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Neofishie said:
Says a lot when no one is willing to buy the owners of CoD IP. I mean, I know Activison has got problems, but they're enough to not want outsiders to own CoD?

If that doesn't show you just how risky the games industry is, nothing will.
It doesn't really make much business sense to buy an entire company for one, stagnant ip.