I posted a while back about Vivendi’s rumoured plans to sell Activision Blizzard to reap some short term gains and to make their shareholders happy in their special place. However according to our favourite analyst, Michael Pachter, this isn’t going to happen for a very simple reason.
Simply no one can afford to buy Activision with it’s $13.5 billion market capitalisation. Granted there are a few companies that could afford that but at the same time gaming has a spotty record and that’s just to big a gamble to take on a publisher with only a few massive titles.
Rather Pachter believes the company will be spun off as a separate entity entirely and then Vivendi can force it to raise a $5 billion loan that added to it’s current $3.5 billion cash reserve will allow Activision to hand back $8 billion to Vivendi to use as a dividend payout as Activision only requires $500 million to operate.
Am I the only one who gets irritated by this? Gaming studio’s are being shuttered all over the place, prices are on the increase and any new IP’s are slapped down as being to risky and yet Activision is going to be forced to fork over it’s $3 billion in cash and take a loan for another $5 billion to save Vivendi’s shareholders.
Maybe I’m completely misunderstanding the reports but right now this is just making me grumpy
Last Updated: July 3, 2012