Activision Blizzard sued over Vivendi buyback

Shareholder files complaint alleging conflicts of interest, unjust enrichment, breach of fiduciary duty

Cash-strapped Vivendi found a buyer for Activision Blizzard last week when it announced a deal to sell most of its stake to two parties: the publisher itself, and an investment group led by current Activision Blizzard executives Bobby Kotick and Brian Kelly. That proposal has met some resistance, as Courthouse News reports that Activision Blizzard shareholder Todd Miller has filed a complaint against the company to stop the deal from going through.

The suit alleges breach of fiduciary duties, waste of corporate assets and unjust enrichment on the parts of Vivendi as well as Activision Blizzard and its board of directors. The plaintiff claims the deal shortchanges shareholders by selling 172 million shares to Kotick and Kelly’s investment group at a 10 percent discount on the company’s closing price the day before the deal was announced. That discount effectively gives the group an instant windfall of $664 million, allowing Kotick and Kelly to take control of the company without benefiting Activision Blizzard or its existing shareholders, according to the complaint. (If the deal goes through, the investment group would be Activision Blizzard’s largest shareholder.)

“(T)here was no apparent business purpose in allowing the insider investor group to participate in the discounted stock offering, other than to aggrandize defendants Kotick and Kelly and provide billions of dollars’ worth of Activision stock to the insider investor group at a discounted price,” the lawsuit states.

As for Vivendi, Miller claims the company is desperate for cash due to $17 billion in debt, a situation that created conflicts of interest for the majority of Activision Blizzard’s board of directors, six of whom currently serve as board members or executives at Vivendi. Miller argues that situation made them beholden to Vivendi rather than Activision shareholders, and notes they will all be retiring from their roles on Activision’s board if the buyback goes through.

Miller is asking for the transaction to be rescinded and for a judge to prohibit such “one-sided self-dealing” in the future. Activision had not responded to a request for comment as of press time.

 

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Activision Blizzard goes independent as Kotick leads $8.2 billion buyout

Kotick and Kelly form separate investment group with Tencent as publisher also buys shares

Activision Blizzard is to become an independent company as CEO Bobby Kotick leads an investor buyout from Vivendi worth $8.2 billion.

The publisher of World of Warcraft and Call of Duty will buy 439 million shares from Vivendi for $5.83 billion. In addition, an investment group led by Kotick and co-chairman Brian Kelly, will purchase 172 million shares worth $2.34 billion.

With Vivendi no longer a major stakeholder, Activision Blizzard becomes an independent company led by Kotick and Kelly, whose investment group also includes Chinese operator Tencent, Davis Advisors and Leonard Green & Partners.

“These transactions together represent a tremendous opportunity for Activision Blizzard and all its shareholders, including Vivendi,” said Kotick.

“We should emerge even stronger-an independent company with a best-in-class franchise portfolio and the focus and flexibility to drive long-term shareholder value and expand our leadership position as one of the world’s most important entertainment companies. The transactions announced today will allow us to take advantage of attractive financing markets while still retaining more than $3 billion cash on hand to preserve financial stability.”

Kotick added, “Our successful combination with Blizzard Entertainment five years ago brought together some of the best creative and business talent in the industry and some of the most beloved entertainment franchises in the world, including Call of Duty and World of Warcraft. Since that time, we have generated over $5.4 billion in operating cash flow and returned more than $4 billion of that to shareholders via buybacks and dividends. We are grateful for Vivendi’s partnership through this period, and we look forward to their continued support.”

Kotick’s investment group will hold around 24.9 per cent of the company, with Kotick and Kelly investing $100 million combined of their own cash. Vivendi will continue to hold around 12 per cent of shares.

 

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World of Warcraft movie starts shooting early 2014

Film being helmed by Moon and Source Code director Duncan Jones

Producer Charles Roven told SlashFilm: “First quarter 2014 we’re going to shoot that movie.”

Evil Dead and Spider-Man director Sam Raimi originally signed up to make a film based on the game back in July 2009, although the project is now being directed by Duncan Jones, who helmed Moon and Source Code.

In March of this year, Raimi claimed the project was significantly held up while under his watch due to “mismanagement” on the game studio’s behalf.

World of Warcraft lost approximately 1.3 million subscribers in the first quarter of calendar year 2013, Activision Blizzard said last month

Activision boss Bobby Kotick said further quarterly declines “are likely” as the year progresses, raising “concerns” as the firm heads towards the competitive holiday period.

He said Blizzard intends to release new content more frequently, to keep players engaged and to make it easier for lapsed players to return to the game.

Blizzard confirmed last week that its unannounced MMO, codenamed Titan, is undergoing “large design and technology changes”. According to reports, Titan is now not expected to release until 2016.

I must admit, I am not as pumped as I was maybe 1 or 2 years ago for this movie. I stopped playing around that time because I just got bored, plus I was studying so my time was being taken so maybe thats why. I just feel the “WOW” factor for a WOW movie is not as strong as it once was, maybe I am wrong because I’ve been out of it a while. Don’t get me wrong, I love World of Warcraft and I just received a free 7 day invite to come back and play which I will do to see what has changed. I would love to see a well made movie or maybe even a trilogy.

Who else is excited for this… or not? Let me know below. Thanks!

 

 

Activision: Black Ops 2 generated $500 million in 24 hours

Yet publisher has not confirmed if latest title is a record for the Call of Duty franchise

Activision is claiming that it has delivered the biggest game launch of the year with Call of Duty: Black Ops 2, estimating that the latest Treyarch game made $500 million in sales on day one.

Sales data was consolidated via sales monitor GFK Chart-Track along with “retail customer sell-through information” and “internal company estimates”.

Activision’s newest blockbuster could, if its estimates are accurate, be poised for a new entertainment record with Black Ops 2. However, the publisher has yet to confirm this.

Modern Warfare 3 grossed more than $775 million globally in its first five days of availability, exceeding the $650 million record set by the 2010 Black Ops across five days.

Activision chief executive Bobby Kotick claimed that life-to-date sales for the Call of Duty franchise have exceeded Star Wars.

He added: “With first day sales of over half a billion dollars worldwide, we believe Call of Duty is the biggest entertainment launch of the year for the fourth year in a row”.

Black Ops 2 launched across the west on November 13th with an estimated 16,000 midnight openings across retail.

“Call of Duty has become more than a product people buy, it’s a brand people buy into,” said publishing boss Eric Hirshberg.

 

Source: CVG