The French conglomerate, Vivendi SA, known for their stakes in such major companies as Activision-Blizzard, have achieved a special kind of fame in the video gaming world.
Over the past year though, they’ve been subject to a series of misfortunes that have left them with more debt than they could handle by themselves. Because of this, they are looking to refashion themselves as a smaller media company.
Another part of their plan is to acquire $3 billion in funds from the highly lucrative Activision-Blizzard coalition, that Vivendi have the controlling stake in with 61% of the shares.
How they plan to do this is still a mystery, and people who are closer to the matter have revealed that Activision-Blizzard would have to raise debt of their own in order to pay the $3 billion dividend to Vivendi.
This huge sum won’t cover all of Vivendi’s debt though, as they’ll have several billion more euros to pay back after that. The stake that Vivendi have in Acti-Blizz would pay out roughly $2 billion, but it seems that Vivendi are getting a bit greedy.
From what we know, Acti-Blizz have $4.3 billion in cash, but $2.7 billion of that is held in off-shore accounts. Using the offshore money would subject it to U.S taxes when it is repatriated, costing them even more money to pay out this dividend.
There seems to be some controversy behind the scenes as well, with reports that Acti-Blizz weren’t happy with this proposed plan from the start and sought other paths, whilst Vivendi are stating that there was never any disagreement.
Bobby Kotick of Activision has attempted to buy out Vivendi in the past, so we know that there probably isn’t good blood between the two companies.
Whatever the case is, it seems that Acti-Blizz are going to be looking to raise a lot of funds in the future. This might mean bad news for gamers, with the potential for Acti-Blizz to start gouging gamers with more DLC and stronger advertising campaigns, to try and squeeze every penny out of their audience.
Source: Wall Street Journal