Boston, MA 06/09/2014 (wallstreetpr) – Activision Blizzard, Inc. (NASDAQ:ATVI) announced the public offering of its 41 million shares owned by Vivendi. The sale was as per the prior repurchase agreement announced during July 2013 and expected to close the deal by May 28, 2014.
As per the transaction, Activision Blizzard will not receive any proceeds from the transaction; however, Vivendi will receive $850 million from the sales of shares. The sale of remaining shares from Vivendi restricted for a period of 15 months.
Prior repurchase program
Activision renamed as Activision Blizzard in 2008 after the business combination among companies and Vivendi became the majority stakeholder. But, according the repurchase program, Activision Blizzard repurchased 429 million shares from Vivendi on October 2013 for cash payments of $5.83 billion.
The funding for the purchase transaction includes cash of $1.2 billion and debt financing of $4.75 billion. The debt financing includes $2.5 billion of secured term loan (mature by 2020), net proceeds from the issuance of $1.5 billion 5.625% unsecured senior notes (due by 2021) and $750 million 6.125% unsecured senior notes (due by 2023).
As a result, Activision Blizzard switched over the complete ownership and owned 715 million shares as of March 31, 2014 whereas Vivendi owns only 12%.
Impact over profitability and cash generation
The repurchase transaction also has a significant impact over Activision Blizzard, Inc. (NASDAQ:ATVI)’s non-GAAP (adjusted) EBITDA due to acquisition related fees and expenses for 429 million shares. So, the trailing 12 months adjusted EBITDA was $1.4 billion, including $80 million related to repurchase transaction.
The Company repaid $375 million for outstanding debt during its first quarter of 2014 and has $4.3 billion of cash available as of March 31, 2014 to address the ongoing requirement.
Activision Blizzard, Inc. (NASDAQ:ATVI) expects the total number of outstanding shares of 750 million, including dilution by FY2014 with net revenues of $4.7 billion and adjusted EPS of $1.27.
