Vivendi overhaul gathers pace with $8.2 billion Activision sale

Fri Jul 26, 2013 2:43pm EDT
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By Christian Plumb and Leila Abboud

PARIS (Reuters) - Vivendi agreed to sell most of its stake in Activision Blizzard, the world's largest videogames publisher, for $8.2 billion on Friday, paving the way for a broader split of the French conglomerate's media and telecoms assets.

Vivendi has been looking to sell assets since Chairman Jean-Rene Fourtou said 18 months ago there would be no taboos as it tried to make sense of a diverse portfolio built up in a frantic spending spree under a former CEO Jean-Marie Messier in the late 1990s.

Even so, since the company's aim is to forge a leaner media-focused group, the sale of Activision Blizzard, the largest and most profitable of its entertainment businesses, came as a surprise, as did the price.

Vivendi is selling the shares in Activision, best known for online multiplayer games World of Warcraft and Call of Duty, for $13.60 each, a 10 percent discount to Thursday's closing price.

Chief Financial Officer Philippe Capron said there was too little synergy between video games and its music and pay-TV businesses.

Shares in Vivendi, which was a water company for most of its 160-year history before it spread its wings in the 80s and 90s, have long suffered from a 15-20 percent "conglomerate discount" that reflects investors' lack of enthusiasm for its ill-fitting collection of businesses.

"The board decided the ambitions we have in media did not necessarily require us to hang on to Activision," Capron said.

The company said it would use part of the proceeds to pay off some of its 13.2 billion euros of debt.   Continued...

A logo of entertainment-to-telecoms conglomerate Vivendi is seen on the main entrance of the company's headquarters in Paris July 23, 2013. REUTERS/Christian Hartmann