Vivendi Reconsiders Activision Sale

Vivendi Reconsiders Activision Sale

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Difficulty unloading Activision may force Vivendi to raise cash by selling another one of its properties instead.

Rumors of a potential sale of publishing giant Activision first came to light in early June, when it was reported that Vivendi SA, which holds a 61 percent interest in the company, was anxious to offload it in order to raise some much-needed cash and boost its sliding share price. The desire to sell has gone from rumor to accepted fact over the past month or so, bolstered by reports yesterday that banking giants Barclays and Goldman Sachs had been brought in to help broker a deal.

The trouble for Vivendi is that nobody appears particularly interested in taking on Activision, which currently boasts a market value of roughly $8.3 billion. Vivendi was originally seeking a 25 percent premium over that value but when companies including Time Warner, Microsoft, Apple and Facebook all took a pass, it said it would consider going as low as a 12 percent premium, which still wasn't enough to attract serious interest.

Also on the table is the possibility of Activision itself buying out Vivendi's interest. Activision has hired J.P. Morgan and Allen & Co. to provide guidance on a potential buyout, but whether it can put together the funds needed to make the deal happen is a question mark. "Vivendi was hoping to get at least a bidder to challenge Activision's management and get a decent premium," a source said. "But it didn't happen so now they are considering other options to raise cash and maintain the rating in the short term."

At this point, the deal appears to be on the shelf. "Vivendi will now think about its options on Activision and take a decision in the coming months," the source said. Instead, the company is now reportedly considering a sale of Brazilian telecom giant GVT, which has a higher market valuation than Activision - $10.42 billion - but may be more likely to bring the price that Vivendi wants. Until recently, GVT was considered a "must-keep asset," but the inability to find buyers for Activision coupled with anxiousness to reduce its current $17.2 billion debt load means the option "is no longer taboo and is now being considered internally."

Source: Reuters

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Not surprised nobody wants Acti-bliz.

No successful new IPs for many, many years now, steadily narrowing catalgoue, even they have to push it and define Black Ops as a 'new' brand. Four point eight billion dollars income in 2010 but somehow less than 10% profit and never any kind of dividend. Stagnant share prices...

Vivendi must be discovering what I did, any investment into Activision is a big money black hole, only way to get anything from their shares is sell 'em!

So, if Vivendi sell Activision, does that mean there's a split with Activision Blizzard?

You wanna cut your debt load? Start with your RIDICULOUS Management bonuses and compensations. Trust me it will save you SO much.

Not surprising, you have a better chance at roulette than turning a profit from shares in gaming companies, even if it is Activision.

I wonder if a self owned Activision would be bolder or just as conservative as they are now? One could only hope that there may be a chance of a management reshuffle.

Maybe EA should buy them out.

You know, way back in the day Activision was actually one of my biggest landmarks in gaming. It was one of the first, or maybe even THE first company to produce third party games. It was founded by 4 ex-Atari employees who were fed up with being paid peanuts to make games.

So they branched off and formed the company that would eventually lead to the death of the videogame market at that time.

Maybe it will be a landmark in gaming once again when Kotick bails after the sale and they stop making the same game each year and just releasing movie licensed titles.

Activision is in a $17billion debt situation? Howdafuq?

*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?

lancar:
*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?

Basically, Vivendi was looking at selling off Activision in order to make some quick money to raise stock prices. However, no one seems interested in owning Activision. A fact I find hilarious.

thebobmaster:

lancar:
*reads the article*

Err.. i don't speak Economic. Can somebody explain whats going on?

Basically, Vivendi was looking at selling off Activision in order to make some quick money to raise stock prices. However, no one seems interested in owning Activision. A fact I find hilarious.

That IS kinda funny :)

DVS BSTrD:
You wanna cut your debt load? Start with your RIDICULOUS Management bonuses and compensations. Trust me it will save you SO much.

Off topic, but... This sounds an awful lot like Nova Scotia Power here.

BeerTent:

DVS BSTrD:
You wanna cut your debt load? Start with your RIDICULOUS Management bonuses and compensations. Trust me it will save you SO much.

Off topic, but... This sounds an awful lot like Nova Scotia Power here.

Is that someone/something I should know?

Says a lot when no one is willing to buy the owners of CoD IP. I mean, I know Activison has got problems, but they're enough to not want outsiders to own CoD?

If that doesn't show you just how risky the games industry is, nothing will.

CardinalPiggles:
Activision is in a $17billion debt situation? Howdafuq?

It's not Activision but Vivendi SA (Blizz-Activision's 61% owners) that's 17BN$ in debt.

Keep in mind this is a huge media conglomerate, 17BN$ isn't peanuts but not the end of the world for them either. They have a total worth around 70BN$ , they're also owners of other known brands like Universal Music.

On topic i'm not surprised nobody wants to buy it, especially at a premium.Like someone said before they have no new ip's for a while now and while WoW is a golden cash cow, it's been on a slow decline for years now, who seriously wants to pick up something when the "peak" has come and gone?

EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.

So Activision is fine it's just that they're being sold off to cover some dept?

kajinking:
So Activision is fine it's just that they're being sold off to cover some dept?

Yeah, they're still hauling in some money, just not as much as Vivendi thought. It's the first asset they wanted to sell to make some cold hard cash so i'm betting it's the "least" successful.

Mekado:
EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.

I would be fine with it. It's extremely easy to create a successful game development studio, and there's nothing to suggest that an EActiblizzavision would change that.

Neofishie:
Says a lot when no one is willing to buy the owners of CoD IP. I mean, I know Activison has got problems, but they're enough to not want outsiders to own CoD?

If that doesn't show you just how risky the games industry is, nothing will.

It doesn't really make much business sense to buy an entire company for one, stagnant ip.

idarkphoenixi:

Neofishie:
Says a lot when no one is willing to buy the owners of CoD IP. I mean, I know Activison has got problems, but they're enough to not want outsiders to own CoD?

If that doesn't show you just how risky the games industry is, nothing will.

It doesn't really make much business sense to buy an entire company for one, stagnant ip.

I would argue that from a dollars and cents sense, CoD is not stagnant IP. Consider that each release has had more sales then the previous.

I guess my surprise is more based around the fact there seemed to be no interest at all. But then again, I know as much about business as I do about the Playstation 7.

Mekado:

kajinking:
So Activision is fine it's just that they're being sold off to cover some dept?

Yeah, they're still hauling in some money, just not as much as Vivendi thought. It's the first asset they wanted to sell to make some cold hard cash so i'm betting it's the "least" successful.

It cant possibly be the least successful otherwise Vivendi wouldn't have whatever a 17.2 billion dollar debt load is.

Mekado:

CardinalPiggles:
Activision is in a $17billion debt situation? Howdafuq?

It's not Activision but Vivendi SA (Blizz-Activision's 61% owners) that's 17BN$ in debt.

Keep in mind this is a huge media conglomerate, 17BN$ isn't peanuts but not the end of the world for them either. They have a total worth around 70BN$ , they're also owners of other known brands like Universal Music.

On topic i'm not surprised nobody wants to buy it, especially at a premium.Like someone said before they have no new ip's for a while now and while WoW is a golden cash cow, it's been on a slow decline for years now, who seriously wants to pick up something when the "peak" has come and gone?

EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.

On the other hand, we haven't seemed to hit peak CoD yet. MW3 made $1 billion in revenue in under _16 days_ . WoW has a revenue of roughly $1 billion a year and even if it loses 5 million subscribers, it'd still make $500 million a year, and it's still the largest thing in the MMO market by 10x whatever anyone else is doing, and that's despite being subscription in an increasingly free to play market. However the MMO market changes, there's no way WoW won't completely dominate it, as long as Blizzard are willing to put in the slightest of changes. It might have lost 1 million subscribers last year, but it still has 9 million more subscribers than anyone else who also decided to renew their subscription at that time.

I can see that Activision might look a bit stale, but honestly, they own the games industry at the moment and a stale Activision Blizzard is still going to be entitled to the largest slice of the growing gaming pie. 'sides new IPs don't sell :D

Mekado:

EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.

EA doesn't have the money for that.

wow has about 4-5 million subscribers tops.

the regional split (of the numbers they give) is about 25% US, 25% EU and 50% Asia.

the Asian players represent the majority of the numbers but the minority of the income.

only around 10% of wows earnings come from the Asian operation.

stop counting the Asians players as subscribers.

they aren't.

they use gamecards that represent a set amount of gametime in hours.

blizzard counts those cards as "subscribers".

this is like counting a pay-as-you-go phone the same as one that has a monthly contract.

wows numbers have always been part marketing con.

if another game could equal them in the EU and US (which would require around 2-2.5 mil subs in both regions) then it would basically be on par with wow from a financial pov because the Asian playerbase that constitutes around 50% of wows numbers is basically a financial irrelevance and primarily serves as a marketing tool in the west where blizzard throw around phases like "worlds largest mmo" off the back of it.

it almost certainly isn't that either.

we can't know for certain because blizzard will never issue numbers in the formats other games use (like concurrent player numbers which is the primary measurement in the east) but there are numerous candidates for games that probably have far more players especially games from the Asian region and there are certainly other online games make just as much if not more money.

oh and blizzards future release schedule is grim at best: two SC2 expansions which they will try and sell for £60 a pop off the back of nothing more than their awesome single player narratives and ofc "titan" the development of which is headed up by "tigole"...which is enough to make me burst into a troll face grin everytime i think about it...because tigole is an elitist asshat of a "hardcore" raider from EQ with next to no real games development experience and who's primary talent is bitching in the bosses ear...that boss being Rob Pardo blizzards executive VP of game design and his former EQ guildmate.

seriously, y'know how people say "most of the original wow dev team left" ? tigole was one of if not the main reason for that and blizzards lead raid encounter designer has already been fired from the project...the guy is completely out his depth as a lead and completely out of touch with the modern (casual driven) mmo market.

plus its "an original property" from a company that basically doesn't do and has arguably has never done "originality".

in all honestly i think "titan" is going to be a trainwreck of a game and this time they can't "indefinite hold"; they don't have the luxury.

but still at least there's those two SC2 expansions...\o/ ?

oh yea and the kung fu panda/pokemon/farmville thing...bahahahahaha

fi6eka:

Mekado:

EA might want to, if just to destroy any hints of competition.I seriously doubt the regulatory bodies would agree to that though.

EA doesn't have the money for that.

I checked for fun and you're right, EA dosen't have the money to buy out activision, i doubt they could get a loan that huge either so yeah it'd have to be someone else buying activision.

This explains a bit though, it's an expensive company in a market where the big dogs can't even come close to affording it.I guess it'll take another media conglomerate to buy it eventually...

Microsoft passed on it. I guess it's not that surprising but I thought it would have helped both the Xbox and their GFWL. (or is Blizzard not part of the sale?)

 

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