No readily apparent buyers for publisher shares
Vivendi are looking for a buyer for their $8.1bn stake in Call of Duty publisher Activision Blizzard, according to Bloomberg.
Wedbush analyst Michael Pachter said, “The problem is there are no readily apparent buyers for Activision. The only option left to Vivendi is to lever up Activision’s balance sheet and pay out all of its cash as a dividend, then spin the company off.”
However, a buyer may be difficult to find because of Activision’s current contraction with its trading. If Vivendi are unable to find a buyer, then it will sell its shares to the market. Trading firm Ascendiant Capital Market’s analyst Edward Woo stated that the current growth of Activision was concerning, especially with the introduction of new consoles.
Investors are currently putting pressure on Vivendi Chairman Jean-Rene Fourtou to restructure the company, which would help to boost its nine-year low stock price.
Vivendi was warned by Moody’s Investors Service and Fitch Ratings that its debt rating could be changed if the company does reduce its overall liabilities.
Current market growth is occurring with social-media games on Facebook.com and not with traditional consoles. Software sales fell by six per cent last year to $8.83bn.
Activision has $3.48bn in cash from short-term investments and no debt, according to its quarterly reports. From an annual report it was shown that Activision’s shareholders saw a return of $886m last year.