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 - Get Report) and J.P. Morgan Chase (JPM - Get Report) 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.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts