Kotick's $8.2 Billion Buyout Makes Activision Independent
Posted by Damien McFerran
Vivendi's stake reduced to 12 percent
Call of Duty publisher Activsion Blizzard is to become independent following a $8.2 billion buyout spearheaded by CEO Bobby Kotick.
Kotick — along with co-chairman Brian Kelly — has formed an investment group which will purchase 172 million shares in the firm, worth $2.34 billion. The publisher itself will pick up 439 million shares from original majority shareholder Vivendi for $5.83 billion.
With Vivendi's stake reduced to 12 percent, Activision Blizzard becomes an independent company led by Kotick and Kelly. The investment group — which will claim around 24.9 percent of the firm — also contains Chinese company Tencent, Davis Advisors and Leonard Green & Partners. Kotick and Kelly have invested around $100 million of their own personal fortunes between them.
Here's what Kotick himself had to say about the deal:
These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi.
We should emerge even stronger — an independent company with a best-in-class franchise portfolio and the focus and flexibility to drive long-term shareholder value and expand our leadership position as one of the world's most important entertainment companies. The transactions announced today will allow us to take advantage of attractive financing markets while still retaining more than $3 billion cash on hand to preserve financial stability.
Our successful combination with Blizzard Entertainment five years ago brought together some of the best creative and business talent in the industry and some of the most beloved entertainment franchises in the world, including Call of Duty and World of Warcraft. Since that time, we have generated over $5.4 billion in operating cash flow and returned more than $4 billion of that to shareholders via buybacks and dividends. We are grateful for Vivendi's partnership through this period, and we look forward to their continued support.