Blizzard gets bought out

[Taciturn]

SANTA MONICA, Calif. & PARIS--(BUSINESS WIRE)--Activision, Inc. (NASDAQ: ATVI) and Vivendi (Euronext Paris: VIV) today announced that they have signed a definitive agreement to combine Vivendi Games, Vivendi's interactive entertainment business -- which includes Blizzard Entertainment’s® World of Warcraft®, the world’s #1 multi-player online role-playing game franchise -- with Activision, creating the world’s largest pure-play online and console game publisher. The new company, Activision Blizzard, is expected to have approximately $3.8 billion in pro forma combined calendar 2007 revenues and the highest operating margins of any major third-party video game publisher. On closing of the transaction, Activision will be renamed Activision Blizzard and will continue to operate as a public company traded on NASDAQ under the ticker ATVI.

http://www.businesswire.com/portal/s...54&newsLang=en

http://www.activisionblizzard.com/

http://news.bbc.co.uk/1/hi/technology/7123582.stm

Under the terms of the agreement, Vivendi Games will be merged with a wholly owned subsidiary of Activision. In the merger, shares of Vivendi Games will be converted into 295.3 million new shares of Activision common stock. Based on the transaction price of $27.50 per share of Activision common stock, this implies a value of approximately $8.1 billion for Vivendi Games. Concurrently with the merger, Vivendi will purchase 62.9 million newly issued shares of Activision common stock at a price of $27.50 per share – a premium of 31% to Activision’s average closing price over the past 20 trading days – for a total of $1.7 billion in cash. As a result of these transactions, Vivendi will own an approximate 52% ownership stake in Activision Blizzard on a fully diluted basis.

[Nightlive]

nvm

[Nightlive]

Within five business days after closing the transaction, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard common shares at $27.50 per share. The tender offer will be funded by Activision Blizzard’s cash on hand at closing, including the $1.7 billion in cash received from the Vivendi share purchase.

In addition, Vivendi has agreed to acquire from Activision Blizzard additional newly issued shares for up to an additional $700 million of Activision common stock at $27.50 per share, the proceeds of which would also be used to fund the tender offer. Any remaining funds required to complete the tender offer will be borrowed by Activision Blizzard from Vivendi or third-party lenders. If the tender offer is fully subscribed, Vivendi will own an approximate 68% ownership stake in Activision Blizzard on a fully diluted basis.

Yep Vivendi wants control. Still the offering of $27.50 wont be so lucrative when the shareholders "ok" the changeover. The stock will increase in value per share (its at $22.15 as of Friday at closing) on Monday at around the $27.50 figure Vivendi wants to buyback at due to this announcement. Vivendi's stock may be affected as well.

EDIT:

The transaction has been approved by the boards of directors of Vivendi, Vivendi Games and Activision. The
transaction is subject to the approval of Activision's stockholders and the satisfaction of customary closing
conditions and regulatory approvals, including expiration of applicable waiting periods and receipt of
applicable approvals under the Hart-Scott-Rodino Antitrust Improvements Act and European Union merger
control regulations. Pending regulatory and stockholder approval, the companies expect the transaction to be
completed in the first half of calendar year 2008.

So this wont go into effect for a while. Still the stock price for both companies will rise in the next few days and may sit at high levels until this "merger" is finalized, and the buyback price may increase as well.

The stock will probobly open around $27.30-40.