Activision Blizzard’s parent company Vivendi reduced its stake in the former by approximately 3%, selling 35 million shares at $12.20 a piece, according to an anonymous source in contact with Bloomberg. The sale was handled by Deutsche Bank AG. A spokesperson told Reuters that “this is a tactical disposal with regards to our overall capital structure, and we remain committed to Activision and to being the main shareholder.” He added that the transaction was wholly unrelated to Vivendi’s recent acquisition of the music portion of EMI, a multinational company that deals in both music and publishing.
The sale generated approximately $427 million and reduced Vivendi’s stake to 60%. Stock in Activision Blizzard has seen quite a bit of growth in value, rising from approximately $10.50 per share mid-August to a peak of $13.93 on November 8th. This was presumably due to the well-received Modern Warfare 3. The price per share is now steadily decreasing, and at the time of writing, had a most recent closing price of $12.05.
Activision Blizzard has provided a very large amount of revenue to Vivendi via very popular franchises such as Call of Duty and World of Warcraft. Vivendi acquired the company in 2007, and the company has steadily grown in value, generating billions of dollars in revenue since then.
Analysis: Despite the spokesperson saying otherwise, most people (including myself) tend to believe the sale is indeed related to the acquisition of EMI’s music assets. Part of the deal required Vivendi to sell off $678 million of its assets to remain in good standing with its creditors and acquire EMI. Given that Vivendi’s majority hold in Activision is very unlikely to be in jeopardy, Activision Blizzard is the most logical asset to liquidate. When Vivendi first purchased the company, they obtained a stake of about 60%, so the loss of the extra 3% is a moot point.
At the most basic level, Activision Blizzard is a huge cash cow, so Vivendi would be insane to lose majority hold in it. Given that, there is no doubt in my mind that they intend to stay very involved with the publisher.