Activision Blizzard Completes Buyback From Vivendi

The massive game developer and publisher is now an independent company

Activision Blizzard
Activision Blizzard has completed the buyback of a controlling stake in itself from Vivendi Universal. With the deal completed, Activision Blizzard is an independent company, majority owned by public shareholders.

The deal was initially announced in July, but was halted in September after multiple shareholders filed lawsuits against the company. The Delaware Supreme Court on last Friday lifted a preliminary injunction preventing the buyback, clearing the path for the multibillion dollar transaction to proceed. With the deal completed, Blizzard and Activision continue together as one of the largest video game publishers in the world, no longer within the Vivendi structure.

Here's the official announcement from Activision Blizzard:

SANTA MONICA, Calif.--(BUSINESS WIRE)-- Activision Blizzard, Inc. (Nasdaq: ATVI), a global leader in interactive entertainment, announced today that it had successfully completed its previously announced acquisition of approximately 429 million company shares and certain tax attributes from Vivendi (Euronext Paris: VIV) for approximately $5.83 billion, or $13.60 per share in cash. ASAC II LP, an investment vehicle led by Activision Blizzard CEO Bobby Kotick and Chairman Brian Kelly, has also completed its purchase of approximately 172 million company shares from Vivendi for approximately $2.34 billion in cash, or $13.60 per share, in a separate transaction.

The shares Activision Blizzard purchased in the transaction will no longer be treated as outstanding, leaving the majority of the remaining 690 million shares in the hands of public shareholders. With the closing of the transaction, ASAC II LP—the investor group which, in addition to Kotick and Kelly, includes Davis Advisors, Leonard Green & Partners, L.P., Tencent, and one of the world's largest global institutional investors—now owns approximately 24.7% of the Company. Vivendi has retained 83 million shares, an approximate 12% stake in the Company.

Activision's stock purchase was financed with a combination of approximately $1.2 billion of domestic cash on hand and recently issued debt, including $1.5 billion of 5.625% senior notes due 2021, $750 million of 6.125% senior notes due 2024, and a $2.5 billion seven-year term loan facility. The entire $4.75 billion of debt financing has a weighted average annual interest rate of less than 5%.

"With the completion of this transaction we open a new chapter in the history of Activision Blizzard," Mr. Kotick said. "We expect immediate shareholder benefits in the form of earnings-per-share accretion and strategic and operational independence. Our audiences and our incredibly talented employees around the world will benefit from a focused commitment to the creation of great games. Our shareholders and debt holders will have the benefit of an energized, invested, deeply committed management team focused on generating long-term, superior returns and effectively managing our capital structure."

Activision Blizzard received committed financing for the transaction from Bank of America Merrill Lynch and J.P. Morgan. J.P. Morgan Securities LLC acted as Activision Blizzard's sole financial advisor for the transaction and Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to the Company. A special committee of independent directors formed to represent the Company in negotiating and evaluating the transactions worked with Centerview Partners as its financial advisor and Wachtell, Lipton, Rosen & Katz as its legal counsel. ASAC II LP worked with financial advisor Allen & Company LLC and its legal counsel is Sullivan & Cromwell LLP.

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