Vivendi Said to Raise $427 Million Cutting Activision Stake
Stock Chart for Vivendi SA (VIV)
Vivendi SA (VIV) raised $427 million selling a stake in Activision Blizzard Inc. (ATVI), reducing its holding in the world’s largest video-game publisher to 60 percent, people familiar with the sale said.
Vivendi, based in Paris, sold 35 million shares at $12.20 apiece after offering them for as much as $12.30, two people with knowledge of the transaction said, declining to be identified as the process was private. Vivendi did not provide a final price in a statement on its website announcing the sale.
Activision shares climbed this month after the Santa Monica, California-based company raised a full-year profit forecast and saw sales of more than $400 million in the 24 hours following the release of the latest version of its game “Call of Duty.” The shares had gained about 23 percent from this year’s lowest level on Aug. 10 before they declined 4.4 percent to $12.24 as of 1:44 p.m. in New York.
Vivendi Chief Executive Officer Jean-Bernard Levy is selling assets to help maintain the firm’s credit rating while financing recent purchases. Vivendi’s Universal Music Group agreed last week to pay Citigroup Inc. (C) 1.2 billion pounds ($1.9 billion) for EMI’s music assets, home to artists such as Katy Perry and Coldplay. The company said it would sell 500 million euros ($678 million) of assets as part of the EMI deal. Vivendi’s Canal Plus pay-television unit also agreed this month to buy a minority stake in the owner of Poland’s TVN network.
The Activision sale isn’t directly linked to EMI, and represents a “tactical transaction” that will improve the group’s capital structure, Solange Maulini, a spokeswoman for Vivendi in Paris, said by phone. Activision said in a statement that Vivendi is still committed to the game publisher.
The deal brings Vivendi’s ownership of Activision to about the level it held at the beginning of this year.
With Brazilian telecom operator GVT, Activision has accounted for much of Vivendi’s recent sales growth, contributing about 800 million euros in revenue in the first half of this year. At the same time, SFR, the French mobile operator that is Vivendi’s largest unit, is seeing flat sales as growth slows in the European telecoms market and it prepares for the entry of a fourth French operator next year.
Activision is Vivendi’s “most liquid asset” thanks to a U.S. listing and a stake well above 50 percent, and today’s share sale may help maintain the company’s current credit rating, Sanford C. Bernstein analyst Claudio Aspesi said in a note to clients.
Activision is also the publisher of the games “Guitar Hero” and “World of Warcraft.”
Deutsche Bank AG (DBK) managed the stock sale, according to a termsheet obtained by Bloomberg News.
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