The deal for Activision values the world's largest games publisher at a 10% discount to its Thursday closing price of $15.18. It will leave the maker of Guitar Hero and Call of Duty with no majority owner for the first time in five years.
Activision will use $1.2 billion of cash on its books and $4.6 billion of debt to fund the share buyback. Bank of America Merrill Lynch (BAC) and J.P. Morgan Chase (JPM) will supply debt for the deal.
ASAC II has also secured equity and debt financing for its transaction. Those funds include about $50 million of equity from Activision's Kotick and Kelly. Kotick has led Activision for almost 20 years. Following the transactions Vivendi will retain a 12% stake in Activision and has agreed to a staggered 15-month lockup on its stake.
Written by Paul Whitfield.
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