Activision buys 429M shares from Vivendi for $13.60 or $5.8B

Activision Blizzard (ATVI) announced that it reached an agreement under which it will acquire from Vivendi (VIVHY) approximately 429M company shares in exchange for approximately $5.83B in cash, or $13.60 per share acquired before taking into account the future benefit from these tax attributes. In a simultaneous transaction, ASAC II LP, an investment vehicle led by Activision Blizzard CEO Bobby Kotick and Co-Chairman Brian Kelly, to which they have committed $100M combined, separately will purchase approximately 172M company shares from Vivendi for approximately $2.34B in cash, or $13.60 per share. Following the completion of the transaction, Activision will be an independent company with the majority of its shares owned by the public. The company will be led by Bobby Kotick as CEO and Brian Kelly as Chairman. Vivendi will no longer be the majority shareholder, but will retain a stake of 83M shares or approximately 12%. ASAC II LP—the investor group which, in addition to Kotick and Kelly, includes Davis Advisors, Leonard Green & Partners, L.P., Tencent, as well as one of the largest global institutional investors—will own a stake of approximately 24.9%. Activision expects that its new outstanding share count and capital structure will result in expected pro forma 2013 EPS accretion of between 18% and 29% on a GAAP basis and between 23% and 33% on a non-GAAP basis. Activision will fund the acquisition with the combination of approximately $1.2B of domestic cash on hand and approximately $4.6B of debt proceeds. The company has received committed financing for the transaction from Bank of America Merrill Lynch and J.P. Morgan. The transaction is expected to close by the end of September.

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