Activision Blizzard Surges (stocks) On Buyout News

[Lochton]

In the treasury? That's silly... and downright irresponsible. A company cannot own itself (ie. shares it holds in treasury are non-voting shares, and dividends are not paid).

That stock needs to either be either released into the open market in a series of public offerings or outright retired.

I think the former is the better option. Retiring the stock saddles ATVI with the entire $8 billion in debt they would need to complete the buyout. That would strangle a company like them. Assuming 5% coupon, that's $400 million a year JUST in interest payments. ATVI's net income is was only $1.1 billion last year and FCF at $1.2 billion.

It would be a serious breach of fiduciary duty to willingly cut profits by 1/3 just to temporarily boost share price. Oh and it WOULD be a temporary boost. Eventually that price will just go down down down down as the company's cash flow is continually weighed on by that debt.

No. They're going to sell the shares back on the open market. I'm not sure how fast or slow they'll do it, but I'm gonna stay far away.

They have already divided some of the shares out to trusted investors. Letting Activision-Blizzard hold the majority still, 3 other companies I think rumors were, takes some shares too - rest goes on the market. They wont be 8 billion in debt in the end, I think it was calculated to 2-3 billion? If not even less.

[Laize]

Vivendi forcing ATVI to buy themselves out at 25% under market price?

Vivendi's stake is currently valued at $8.75 billion and the buyout will not be for the entirety of Vivendi's stake. I'd say they're making out pretty good.

[Lochton]

Vivendi's stake is currently valued at $8.75 billion and the buyout will not be for the entirety of Vivendi's stake. I'd say they're making out pretty good.

Not the intire. Think Vivendi is allowed to be holding like. 10-12% (Though, what I tihnk, haha - we don't know till the pen hits the paper. But they are gone as a majority, even as part of the major investors)

[Laize]

They have already divided some of the shares out to trusted investors. Letting Activision-Blizzard hold the majority still, 3 other companies I think rumors were, takes some shares too - rest goes on the market. They wont be 8 billion in debt in the end, I think it was calculated to 2-3 billion? If not even less.

I believe you're confusing their remaining current assets and debt.

[Butler to Baby Sloths]

Vivendi's stake is currently valued at $8.75 billion and the buyout will not be for the entirety of Vivendi's stake. I'd say they're making out pretty good.

I meant that the price per share that ATVI and Kotick/Tencent are paying is 25% below the market price at the time the deal was made ($13.60 per share instead of $17.34).

As of this deal, of the shares in ATVI: ATVI hold 35%. Kotick/Tencent and associates hold 14%. Vivendi hold 12%. Others hold 39%.

[Laize]

Not the intire. Think Vivendi is allowed to be holding like. 10-12%

I know. My point is that Vivendi is getting a check for $8.1 billion for 3/4 of their stake... while their entire stake is valued slightly over that.

It's like if you had a $1,000,000 property with 2 houses on it and I offered to buy one of the houses for the full $1 million and you kept the other. It's a damn sweet deal.

[Lochton]

I believe you're confusing their remaining current assets and debt.

Well, their current was last announce, around the 5 billion. with no debt calculated.

[Laize]

I meant that the price per share that ATVI and Kotick/Tencent are paying is 25% below the market price at the time the deal was made ($13.60 per share instead of $17.34).

Source? I'm only seeing lump sum payments. It sounds like whoever wrote the article just did some division against Vivendi's entire stake.

[Lochton]

I know. My point is that Vivendi is getting a check for $8.1 billion for 3/4 of their stake... while their entire stake is valued slightly over that.

It's like if you had a $1,000,000 property with 2 houses on it and I offered to buy one of the houses for the full $1 million and you kept the other. It's a damn sweet deal.

Aye. It is a good deal. Just, think I miss read your previous post where you wrote about 8 billion in debt.. "I think the former is the better option. Retiring the stock saddles ATVI with the entire $8 billion in debt they would need to complete the buyout. ". But I reread is again, heh. Didn't notice you wrote complete, I just noticed the buy out from their majority.

[Butler to Baby Sloths]

Source? I'm only seeing lump sum payments. It sounds like whoever wrote the article just did some division against Vivendi's entire stake.

From the article on bloomberg.com ( http://www.bloomberg.com/news/2013-0...tml?cmpid=yhoo )

Activision, the maker of “Call of Duty” and “World of Warcraft,” will take on debt to purchase shares held by Vivendi for $13.60 each, or $5.83 billion in total. Activision CEO Bobby Kotick and his partners, who include co-Chairman Brian Kelly, Chinese video-game publisher Tencent Holdings Ltd. (700), Davis Advisors and Leonard Green & Partners, will pay $2.34 billion.

[Lochton]

From the article on bloomberg.com ( http://www.bloomberg.com/news/2013-0...tml?cmpid=yhoo )

Not disagreeing. Just find it funny that media is lazy. *grins* So, in the media's book, Activision the company, made Blizzard's games. And not Activision-Blizzard the partnership. Heh.

[Butler to Baby Sloths]

Not disagreeing. Just find it funny that media is lazy. *grins* So, in the media's book, Activision the company, made Blizzard's games. And not Activision-Blizzard the partnership. Heh.

Activision-Blizzard does fuck all towards making games, either on the Activision side or the Blizzard side. They are purely a set of managers.

[Lochton]

Activision-Blizzard does fuck all towards making games, either on the Activision side or the Blizzard side. They are purely a set of managers.

Yes, I know. That is why I'm confused why they say Activision when they didn't do the games. So hard to say Activision and Blizzard, or just generalize it with their partnership as in general, "these guys does games".