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Activision Blizzard Gets Tender With Itself
Posted by Brian Crecente at 7:00 AM on August 20, 2008
If you're into stock and finances you might recall that BlizzAct offered to buy up as much as 146.5 million shares of their common stock at $US 27.5 a pop. Well their offer wrapped up last week and they're announcing today they managed to snag nearly 86,000 shares for about $US 2.3 million.
I'm a little surprised that they weren't able to grab up more of their stock, but I'm even more surprised that they planned on financing the entire buy up with cash on hand. Am I the only one who thinks that the BlizzAct folks walk around with life-sized, solid-gold avatars that they dress up for fun. Wasteful! I'd spend all my WoW loot on monkeys and monkey training. And maybe monkey nappies... maybe.
Activision Blizzard Announces Final Results of Self-Tender Offer
SANTA MONICA, Calif., Aug 19, 2008 /PRNewswire-FirstCall via COMTEX News Network/ — Activision Blizzard, Inc. (Nasdaq: ATVI) today announced the final results of its tender offer to purchase up to 146,500,000 shares of its outstanding common stock at a price of $27.50 per share, net to the tendering stockholders in cash, less any applicable withholding taxes and without interest. The tender offer expired at 5:00 p.m., New York time, on Wednesday, August 13, 2008.
Pursuant to the tender offer, Activision Blizzard has purchased 85,916 shares of its common stock at a purchase price of $27.50 per share for a total cost of approximately $2.3 million, excluding fees and expenses relating to the tender offer. Activision Blizzard is funding the purchase of shares in the tender offer with available cash on hand.
The tender offer was agreed to be made in connection with the business combination between Activision, Inc., now known as Activision Blizzard, Inc., and Vivendi Games, Vivendi's interactive entertainment business — which includes Blizzard Entertainment's(R) World of Warcraft(R). In accordance with the business combination agreement, the purchase price per share for the tender offer was equal to the price per share that Vivendi paid for the stock it purchased from Activision.
About Activision Blizzard
Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online, PC and console game publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry.
Activision Blizzard maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Romania, Australia, Chile, India, Japan, China, South Korea and the region of Taiwan. More information about Activision Blizzard and its products can be found on the company's website, http://www.activisionblizzard.com.
Comments (AU Comments · US Comments)
baumer74
Posted August 21, 2008 2:17 AM
yes, no one subscribed to tender since it was hopelessly out of date with current share price. as result, activision owns more of the combined company rather than vivendi. so now that they didn't have to buy up tendered shares, they are sitting on more cash than would have otherwise which they can either use for a new stock buyback and/or acquire other developers. probably will do both.
SavidDaunders
Posted 7:31 AM 20/8/08
A HUGE reason companies say they will be "up to" x amount of shares is that just by saying this the company's stock typically increases in value. Reduce supply, or give the appearance that supply will be reduced, and prices increase.
SavidDaunders
Nick
Posted 7:30 AM 20/8/08
If what I believe is true, the reason that Activision Blizzard were only able to buy 86,000 shares was because of the price that they were buying them at. ActiBlizz were buying at $27.50 per share, but the market value is in the low $30s (closed at $35.18 today), so I'm actually surprised anyone was willing to sell their stock below market value.
You can probably chalk it up to those odd letters sent out to stockholders stating that "now's a good time to sell because you might lose money in the future", which is true in the entire stock market. With the 2:1 split happening on Aug 25 and a lot of games coming out in the near future, the company is in a great position financially.
I believe that the cash that the company had to make the potential purchases came from Vivendi and that whole ordeal. But yes, someone at ActiBlizz is definitely making some serious pocket change.
Nick
jtan
Posted 7:28 AM 20/8/08
they only snagged that tiny bit because they offered 27.50 for it when it was trading at $30+. When they announced the offer, ATVI stock was only $22ish, and it took something like 6 months to close the merger. During that 6 months the price went up a lot.
Nobody is gonna sell their shares that are worth $30+ on the open market for $27.50. 86,000 shares is chump change for blizzvision, or any institutional investor for that matter (hedge funds, mutual funds..etc....) I'm actually really curious who was the chump that sold the shares????
jtan
Krondonian
Posted 7:21 AM 20/8/08
@CarbonFalcon: That's a good point. I assumed that because of said titles ActiBlizz would be willing to pay more to get more stock. Presumably the stockholders thought wisely.
Krondonian
sir_carrot
Posted 7:16 AM 20/8/08
Yeah, uh.
I don't get it.
Someone's got to be sitting on a Mt. Everest pile of cash.
sir_carrot
PsycheE
Posted 7:12 AM 20/8/08
Chump change. Who would have sold their shares with AAA floodgates opening in the coming years?.
PsycheE
CarbonFalcon
Posted 7:11 AM 20/8/08
@Krondonian:
Well, it depends. Stockholders would have to be willing to cash out on the stock as well and it's pretty obvious that Blizzivision stands a good chance to make loads and loads of money in the coming years the release of StarCraft 2 and Diablo 3 (among the Activision titles): A good reason to hold on to the stock.
CarbonFalcon
CarbonFalcon
Posted 7:08 AM 20/8/08
I think they might be trying to hoard the stock so that they can make more money when Blizzard, you know, finally comes out with AAA games each year. WotLK this year, StarCraft 2 is looking like it's going to hit in 2009, and Diablo 3 (sad to say it) will probably hit in 2010.
However, I believe that they did say that StarCraft 2 development was stalled a bit, so it is possible that Diablo 3 could also hit in 2009 if they released SC2 in February and set aside November for Diablo 3 or some such plan.
Although, I don't think that would be a wise move, seeing as the collective Blizzard fanbase would implode upon hearing the news.
CarbonFalcon
Krondonian
Posted 7:07 AM 20/8/08
WoW has something like 10 million subscribers, no?
So at £15 per month for 8 million people it would be £120mil coming in every month. I don't know the costs of running nor the international prices...but whatever currency you use it's still shitloads.
I'm surprised they didn't buy more.
Krondonian
Kymarak
Posted 7:02 AM 20/8/08
Nice. I wonder what the stock options are for the workers? Either way, you hold it and make money, or you sell it out, for a pretty large paycheck.
Kymarak
Kohath
Posted 9:30 AM 20/8/08
I was surprised they went through with this at all. "We'll buy your $33 stock for $27.50" is a strange offer.
This was supposed to end in Vivendi having a large majority ownership in Acti-lizard. Since no one tendered shares, I wonder what happens next?
Kohath
Placentasaurus
Posted 9:21 AM 20/8/08
It's not that surprising that they used cash on hand, Blizzard alone rakes in at least 1.8 billion a year just from WoW monthly payments.
Placentasaurus
catmurderer
Posted 12:14 PM 20/8/08
Goddamnit... I was so close to buying this stock in may :/
catmurderer
mizeriq
Posted 7:10 PM 20/8/08
@Kohath: They'll have just 52%
mizeriq