This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Vivendi in Big Activision Deal

Updated from 7:58 a.m. EST

Vivendi says it will acquire a controlling interest in Activision (ATVI ) through a transaction that the companies are valuing at $18.9 billion.

The French media and telecom colossus said Sunday that it will merge its video game operations with Activision, maker of titles like Guitar Hero and Call of Duty and rename the venture Activision Blizzard.

The combined units will rival gaming outfits like Electronic Arts (ERTS ) and trade under the Activision ticker on Nasdaq.

ATVI-Vivendi is a Game-Changer

Activision shares rose $5.95, or 27%, to $28.10 in pre-market trading Monday.

The deal calls for shares of Vivendi Games, seller of titles like World of Warcraft and Crash Bandicoot to be converted into 295 million new shares of Activision stock at a price of $27.50 a share, according to a joint press release. Vivendi will also buy 63 million shares of Activision stock at $27.50 for a 52% stake in the new company.

In total, Vivendi will acquire the position for $9.8 billion, implying the other 48% of the new firm is worth an additional $9.1 billion.

After the deal closes sometime in the first half of next year, Activision Blizzard will pay up to $4 billion in cash for as many as 145.6 million shares of Activision Blizzard stock at $27.50 a share. The terms represent a 24% premium over the Friday closing price of $22.15.

The new company is expected to be one of the largest video game companies and have approximately $3.8 billion in pro forma combined calendar 2007.

The news comes just five days after Activision boosted its third quarter profit and sales guidance based on robust sales of its two big releases, Guitar Hero III: Legends of Rock and Call of Duty 4.

For the third quarter ending Dec. 31, Activision expects $1.23 billion in revenue and earnings of 70 cents a share, up from its prior revenue of $1.05 billion and earnings of 55 cents a share, excluding charges.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
ATVI $22.48 0.04%
MSFT $41.21 -0.60%
AAPL $124.24 0.70%
FB $83.01 0.11%
GOOG $555.17 -0.65%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs