July 26 - Activision gains independence by buying out Vivendi's stake with a group of investors for $8.2 bln. Fred Katayama reports.
Investors are cheering as if they'd won the war. Activision Blizzard, the maker of war-simulation game Call of Duty, won independence from France's Vivendi. Activision and its management are buying the bulk of Vivendi's stake in the company for $8.2 billion. And they're getting those shares at a 10 percent discount to Thursday's closing price. Cowen analyst Doug Creutz says that amounts to a more than 675 million dollar bonus for shareholders. He adds, "We believe investor focus can return to the company's strong existing franchises, the potential for a major hit in Destiny next year, and excitement around the upcoming console cycle." Shares of the world's largest video games publisher rose sharply on the news. They're up 43 percent this year. But that's nearly half of arch rival Electronic Arts' 75 percent gain. Activision will take on $1.4 billion in debt to do the deal. But analysts like the fact that CEO Bobby Kotick and his investment group will become the largest shareholder. Kotick will have a freer hand to do deals. And the investment group includes the Chinese web portal, Tencent. That, Bank of America says, could ensure a strong launch of Call of Duty Online in China. Separately, Activision pre-announced earnings that beat expectations, but it said subscribers for its World of Warcraft game had declined.