Given Activision-Blizzard’s self-made reputation for big, brash business, it’s always seemed a tad embarrassing for them to be tethered to Vivendi – a parent company that only ever acknowledges its wildly successful games division to weakly blather about selling it off.
And so finally, in lieu of a competitor well-off enough to purchase Call of Duty’s daddy, the publishers have bought their own freedom. CEO Bobby Kotick has led an $8.2 billion investor buyout to relieve Vivendi of most of its shares and set up Activision-Blizzard as an independent company.
The publishers will buy 439 million shares from Vivendi with a whopping $5.83 billion from its own coffers, while an investment group led by Kotick and co-chairman Brian Kelly will mop up the rest, worth $2.34 billion.
Vivendi will lose their position as a major stakeholder – though Kotick and Kelly have garnered investments from other publishers, including Chinese online game specialists Tencent. Tencent also own a 40% stake in Epic Games.
“These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi,” said a triumphant Kotick.
“We should emerge even stronger – an independent company with a best-in-class franchise portfolio and the focus and flexibility to drive long-term shareholder value and expand our leadership position as one of the world’s most important entertainment companies.”
Kotick went on to credit Blizzard, quite rightly, with much of the company’s recent success.
“Our successful combination with Blizzard Entertainment five years ago brought together some of the best creative and business talent in the industry and some of the most beloved entertainment franchises in the world, including Call of Duty and World of Warcraft,” he said.
“Since that time, we have generated over $5.4 billion in operating cash flow and returned more than $4 billion of that to shareholders via buybacks and dividends. We are grateful for Vivendi’s partnership through this period, and we look forward to their continued support.”
Despite turning their piggy bank upside down to make the deal happen, Activision retain an absurd $3 billion in cash reserves. Kotick and Kelly, by the way, are very rich men – between them, they’ve invested $100m of their own funds.
Don’t expect much to change at the publisher. This is very much yesterday’s Activision-Blizzard, newly free from the spectre of an ailing telecommunication company. But hypothetically, if you were to change Activision for the better – where would you start?