The Paris-based conglomerate that operates popular European media assets like Canal Plus, may sell all or part of its stake in Activision to help unlock value in its disparate media and gaming assets, according to a Bloomberg report. Vivendi also owns Universal Music Group and telecom assets in France, Morocco and Brazil.
Vivendi took control of Activision in 2007, when it merged its Blizzard gaming unit with Activision in a push to create the world's largest video games company. Activision shares have held up well in recent trading amid increased competition from free Web games offered by the likes of Zynga (ZNGA) that has weakened shares of video game makers Electronic Arts (ERTS) and Take-Two Interactive (TTWO), both off over 25% in the past 12 months.
Still, when Vivendi bought a controlling stake in Activision in 2007 for $9.8 billion, the deal valued Activision shares at $27.50, meaning that a disposal will likely lead to a loss, even after two-for one share split.Vivendi has yet to decide whether to use proceeds from a prospective sale to launch share buybacks or increase investment in its other media assets -- if it in fact sells all or parts of Activision, sources told Bloomberg. Activision Blizzard shares fell over 6% in early trading on Thursday but the decline was halved to 3% in mid-morning, higher than usual volume, trading. After reaching a post-crisis peak of $14.40 a share in November, Activision shares have fallen and are now down nearly 4% year-to-date, recently trading at $11.70.
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