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Activision Soars After Accord to Buy 0ut Vivendi Holding

Activision Blizzard Inc. (ATVI) and a group led by Chief Executive Officer Bobby Kotick agreed to buy most of Vivendi SA (VIV)’s stake in the company, the biggest U.S. video-game publisher, for $8.17 billion. The stock soared.

 The maker of “Call of Duty” and “World of Warcraft” will take on debt to purchase shares held by Paris-based Vivendi for $13.60 each, or $5.83 billion. Kotick and partners including co-Chairman Brian Kelly, Chinese game maker Tencent Holdings Ltd. (700), Davis Advisors and Leonard Green & Partners, will pay $2.34 billion, according to a statement yesterday.

The accord ends five years of control over Activision by the French media and telecommunications company, and months of uncertainty for the Santa Monica, California-based video-game company as its departing parent sought ways to reduce debt. Activision and Kotick are buying out Vivendi at a 10 percent discount to yesterday’s closing price and said the terms would lead to faster profit growth this year.

“We tried to construct a transaction that rewarded our public shareholders and this structure accomplishes that,”  Kotick said in a telephone interview. His group will own 25 percent of the company, according to the statement.

Activision soared to an almost five-year high, gaining 13 percent to $17.21 at 12:10 p.m. in New York after reaching $17.76. As of yesterday, the stock had risen 43 percent this year, giving the company a market value of $17 billion. Vivendi added 0.6 percent to 16.07 euros in Paris. Tencent climbed 3.9 percent to HK$347.40 in Hong Kong.  Read More

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Posted on July 26, 2013, in #games and tagged , , , , , . Bookmark the permalink. Leave a comment.

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