Vivendi to plunder the Activision coffers this week

2 min read

Remember earlier this month when Gavin told you about Vivendi being greedy and taking $400 million from Activision-Blizzard so that they can invest it elsewhere?  Well, it’s actually closer $3 billion.

Vivendi, who owns a 61% stake in Activision-Blizzard, wants to pay down its €13.19 billion debt in order to avoid a credit downgrade.  As explained by Forbes:

On July 9th, five years after the merger of Activision and Vivendi’s Blizzard division, Vivendi gained the right to force Activision to pay a special dividend without permission from non-Vivendi directors on the Activision board.

While Activision has about $4.3 billion on the books, $2.7 billion is held out of the US of A – repatriating that money would trigger taxes to the tune of about $1.5 billion.  Lovely.  This means that Activision will probably have to take on debt in order to pay the dividend.  Of the $3 billion, $2 billion will go straight into the Vivendi coffers (the rest, presumably, will go to stock holders).

While Bobby Kotick may want to buy Vivendi out rather than see his accounts plundered, it’s unlikely that Vivendi will be willing to sell Activision before using it’s controlling stake to pay down its own debts.

Activision-Blizzard is still in a strong position, and Kotick has avoided the major layoffs that have become all too familiar lately.  I bet that they can actually handle some extra debt without experiencing major financial hardship – the dog from the new COD can probably come and rescue them.  That said, numbers are declining in WoW, and I seriously doubt that microtransactions will save them, there.  This is when I appreciate Kotick’s hard-nosed mentality and hope that he can keep everything together – so many gaming companies are going through such hard times, it would be a shame if Activision-Blizzard had to suffer through no fault of their own.

On a side note, $4.3 billion just sitting in their accounts?! That’s a lot of COD!

Last Updated: July 23, 2013