Sections

Activision Blizzard owner considering cash grab – rumour

Monday, 8th July 2013 06:28 GMT By Brenna Hillier

Unable to sell off Activision Blizzard, majority owner Vivendi is said to be considering a raid on the twin publisher’s capital.

According to a Financial Times report [paywall], Vivendi is looking at ways to make some ready money from Activision Blizzard after a failed attempt to sell off its 61% majority stake.

Citing anonymous sources, the publication claims Vivendi and Activision Blizzard have discussed having the latter company extend a tender offer partially covering Vivendi’s stake, funded by its available cash or a debt offering.

An agreement is in Activision Blizzard’s best interests because Vivendi will gain the power to forcibly extract cash dividends from its property as of Tuesday, apparently; in the past, Vivendi has had to gather support from Activision Blizzard’s directors for any cash grab which would bring the company to a net debt of over $400 million.

Vivendi is an international company headquartered in France which has finger in a wide variety of pies, including the oil industry. It always seems to be selling off Activision, but nobody seems to be in a position to buy one of the largest publishers in the world.

Vivendi pushed a new board member on Activision Blizzard last year, but still doesn’t seem happy with the US company’s performance.

Thanks, Reuters.

Breaking news

10 Comments

Sign in to post a comment.

  1. For Blood

    Bankrupting it is an idea. We need less CODs anyway.

    #1 10 months ago
  2. JimFear-666

    someone can explain me this like im 5 years old ?

    #2 10 months ago
  3. zme-ul

    @2
    I didn’t get it either; not everyone on this planet is majored in economy

    the most I understood is that Vivendi is planning to get cash from Acti-Blizz via the dividends
    but that means they’ve only giving Vivendy % of their profits
    so, where is the problem? cuz’ frankly … I don’t see one

    #3 10 months ago
  4. Myth

    Like you’re five: The bank likes Activision and is willing to lend them money. Activision will then pay that loan to their owners, Vivendi. Vivendi keeps the cash and Activision pays off debt.

    This makes sense for Vivendi if they need the cash for some other part of their company, and the banks don’t like that part as much.

    You see this in quite a few acquisitions, actually – Company B is for sale, Company A buys them for 2 billion dollars. Company B subsequently takes out a loan of 1 billion dollars and pays that money to Company A – now Company B has to make loan payments, and in essence their future profits helped fund their own purchase.

    #4 10 months ago
  5. zme-ul

    so .. hold on a moment

    why would a bank with intact brains loan Acti-Blizz money to subsequently give to Vivendi?!
    doesn’t Acti-Blizz need like a freaking valid reason to go to the bank for money?
    you just don’t go to a bank and ask them nicely to just give you couple of mil USD because .. because the rain

    #5 10 months ago
  6. Myth

    Start with how you view a bank. Banks make money on loaning money – that’s their business and how they generate money instead of just storing it. You deposit money, they pay you a low rate and then they loan your money to someone else at a higher rate – and that’s how their business works.

    In that world it’s in their interest to loan out as much money as possible within reason. So if Acti-Blizz is a sound company with lots of assets and profits to make loan payments, why wouldn’t the bank loan them money? If Bank A won’t do it, you go to Banks B and they probably will.

    It’s not the bank’s business what they want to do with them – and as I said, this isn’t that uncommon of a thing to do.

    #6 10 months ago
  7. zme-ul

    oh yeah .. now I understand why the US market crashed in 2008

    banks hand over hard cash left and right like freaking candy, without asking the loaner for a valid reason

    #7 10 months ago
  8. MidlifeAxe

    I’m surprised they’re struggling with the amount of Revenue Acti-Blizz makes alone.

    #8 10 months ago
  9. Myth

    This isn’t just the US – banking works that way all over the world. There’s really no great harm in this one, as the bank prices the loan on a careful examination of whether the lender is worthy of the credit – it’s part of a risk assessment.

    What crashed the market in 2008 was vastly different – that was risk being hidden behind 2-3 layers of obfuscation which simply shouldn’t be legal.

    #9 10 months ago
  10. zme-ul

    me: I can haz 1bil USD?
    bank: what’cha buyin’?
    me: a nuclear sub
    bank: sign on the dotted line and the cash is yours

    #10 10 months ago