Activision separation deal cleared

Delaware Supreme Court lifts preliminary injunction to clear the way for transaction to be completed by October 15.

by

Activision Blizzard announced today that the Delaware Supreme Court has lifted a preliminary injunction preventing the company from buying parent company Vivendi's stake in the game maker.

This effectively clears the path for the company to complete the transaction that will separate Activision Blizzard from Vivendi. The deal is expected to be complete by October 15.

A lower court issued the injunction last month after shareholders sued Activision Blizzard, claiming the transaction would "unjustly enrich" several executives.

In July this year, Activision Blizzard announced its intention to separate from Vivendi. The purchase will see around 429 million shares change hands, totaling roughly $5.83 billion in cash.

Activision CEO Bobby Kotick and co-chairman Brian Kelly are responsible for the purchase of 172 million shares, worth an estimated $2.34 billion. The pair have personally contributed $100 million to secure the sale. As a result, Kelly would become sole chairman under the restructure, with Vivendi retaining a minority 12 percent stake in the business.

The deal was orchestrated by Activision Blizzard's management team and assisted by investors. The intended trade would result in shareholders owning a controlling stake in the business.

Discussion

31 comments
blackothh
blackothh

Im actually very sad to hear this, when blizzard was under vivendi alone, they made amazing stuff, when they are part of activision and vivendi, wow went to hell and diablo died, but starcraft went on strong. so not all their stuff was crap, now they are going to be fully under activision, so goodbye blizzard.......you treated my childhood well.....

Vexov
Vexov

Now maybe someone sensible will drop that garbage D3, its a black sheep of Blizzard games. :D

Zeeksie
Zeeksie

Now all that needs to happen is for Blizzard to separate from Activision.

MN121MN
MN121MN

Don't know if this is bad for their future or not..... though that IS a large sum of money

Unholy123
Unholy123

" CEO Bobby Kotick and co-chairman Brian Kelly are responsible for the purchase of 172 million shares, worth an estimated $2.34 billion. The pair have personally contributed $100 million to secure the sale "

Clearly they plan to make out like bandits on this deal hence why they are so desperate to make it happen.

Mr_Big_Boss
Mr_Big_Boss

So this is why there's an Activision sale on PSN right now. To increase sales to help pay this purchase.

nomadski69
nomadski69

I love the world of high rise executives, where you can make multiple billion dollar purchases with just $100m.  


I wish I could buy that £90k Aston Martin with £20....

Daian
Daian

I really hope Bobby Kotick gets hit by a bus or something. I feel bad, but I want this disease to stop poisoning the gaming industry.

jmc88888
jmc88888

 Hard to say if this is a good deal or bad deal for Activision/Blizzard.  Also depends on your point of view.


The pro's are....they are in an environment where they can cheaply borrow if needed to fund this.  That the people at the top might get bonuses and stuff.


The con's are...the stock market is heavily artificially inflated far above it's worth and that Activision/Blizzard will be buying out the shares at an extreme premium.

The stock market is only kept afloat by hyper inflationary printing, and once that stops or slows, things will start collapsing again.  Where the stock market was in 2009 can easily be beat to the downside.  During that time, Activision/Blizzard stock was worth half as much roughly...about $9 a share and not $17.   


It wouldn't be very smart to buy it out and then see a market crash Activision stock down to $5.  Then think...hmmm they borrowed money to buy their stock at 3x the value so some big wigs can cash in.

MJ12-Conspiracy
MJ12-Conspiracy

the reason the deal was being obstructed is because it enriches the pockets assholes like Bobby Kotick......basically all the top execs get fat paid by this deal......just another way for the crooks to get rich off the blood sweat and tears of the workers and if the developers fail t sell well on their game it's our fault but the studios who made the games suffer losses in manpower and in pay......this is Activision in a nutshell.....

RossRichard
RossRichard

Shame Blizzard won't separate from Activision.

Lhomity
Lhomity

@nomadski69Uh, not quite. They didn't get billions of dollars worth of shares for $100 million.

Here's a more detailed explanation.

"The court’s decision ensures independence for Activision, the largest U.S. video-game company, through the $8.2 billion transaction announced in July and led by Chief Executive Officer Bobby Kotick. Activision will use cash and take on debt to purchase shares held by Vivendi for $13.60 each, or $5.83 billion. 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 for about a 25 percent stake."

 Source: http://www.bloomberg.com/news/2013-10-10/activision-stock-deal-allowed-to-proceed-by-court.html

soulless4now
soulless4now

@Daian Just wait until the next CoD game. He's going to praise it for like the first 3 months after it rakes in the money. 

Unholy123
Unholy123

@jmc88888  You know you may just be right if old Bobby and his buddy "magically" cash out their massive stock options after the buyout but before a crash in the price they'll make out like bandits while the company who took on the debt to afford that buyout of stocks collapses... christ I hope that doesn't happen.

SteamyPotatoes
SteamyPotatoes

@RossRichard i hear what you're saying but i feel Vivendi were the biggest culprits for publisher pressure, Bobby Kotick has always been cool with Blizzard and let them do what they want.

korvus
korvus moderator

@Yomigaeru Yep, I thought it was a pretty great game back then =)