REPORT: Vivendi Seeking To Unload Activision
Big news people: Reuters is reporting that French conglomerate Vivendi is seeking to unload their holdings in Activision Blizzard, according to sources close to vivendi’s board. According to their source, “It’s nothing official yet, but they’ve asked a bank to go and talk to possible buyers for Activision,” so take this with a huge grain of saler.
The rumored move comes in the wake of significant setbacks for the company. While Activision Blizzard is hugely successful, Vivendi itself is struggling with a sharply declining share price and a huge amount of debt, caused in part by having acquired French mobile operator SFR just as the market was seriously impacted by a competing business offering vastly cheaper service. Last month, Vivendi CEO Jean-Bernard Levy resigned, and making matters worse, today it was put under negative credit watch by Standard & Poor’s. The sale of their 60% stake in Activision Blizzard could net Vivendi 10 Billion dollars.
I should caution that I’m not exactly an expert in this kind of business process, however it seems that liquidating one of their more profitable arms will only flood the rest of the company with cash once. If Vivendi’s other operations remain troubled, this is likely to be a short term solution at best. It’s a lot like cutting off your strongest arm to feed the shark trying to gobble you up. Eventually the shark is probably going to be hungry again.
Vivendi is reportedly reaching out to Microsoft, Time Warner and China’s Tencent Holdings among other huge entities. We’ll definitely be paying attention to the story.