September 10, 2013 / 6:15 PM / 5 years ago

Activision adjusts structure on $5 billion financing package

NEW YORK (Reuters) - Activision Blizzard Inc (ATVI.O) adjusted the structure on the $5 billion financing package backing the company’s plan to spin itself off from Vivendi (VIV.PA) and buy back shares, sources told Thomson Reuters LPC.

Visitors look at a presentation at the ActiVision Blizzard exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013. REUTERS/Ina Fassbender

Bank of America Merrill Lynch and JP Morgan lead the deal.

The company is now proposing a $2.5 billion, seven-year covenant-lite term loan B, versus $2.25 billion, previously. The company is also planning a $250 million revolving credit facility.

In addition, the company increased its planned eight-year note issuance by $500 million to $1.5 billion, and upsized its proposed 10-year note issuance by $250 million to $750 million. The company has canceled a $1 billion, seven-year note previously in market.

Price talk on the TLB is unchanged at LIB+275-300, with a 75bp Libor floor and a 99.5 original issue discount. The TLB will carry 101 soft call protection for six months.

Indicative pricing on the eight-year notes is 5.75-6 percent, while the 10-year notes are guided at 6.25-6.5 percent.

Activision plans to fund the purchase of 429 million of its shares from Vivendi with a combination of $1.2 billion in cash on hand and new debt, according to a company filing. The transaction is expected to close by the end of September. Activision is buying the shares back for $5.83 billion, or $13.60 per share.

Separately, Activision CEO Bobby Kotick and Co-Chairman Brian Kelly will purchase 172 million shares for $2.34 billion. After the transaction, Vivendi will no longer be the majority shareholder, but will retain a stake of 83 million shares, or approximately 12 percent.

Activision Blizzard Inc is a worldwide online, personal computer, video game console, handheld, and mobile game publisher.

Editing By Jon Methven

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