Pachter: An Activision Sale Improbable, A "Spinoff" Likely
The problem is obvious: $8 billion is a sh** ton of money.
Last week, it was reported that Telecom giant Vivendi was looking to sell their share of Activision Blizzard. And because the French conglomerate owns 61% of the world's biggest video game publisher, they might be looking for $8.1 billion.
At the time, Wedbush Morgan analyst Michael Pachter said if Vivendi couldn't locate a buyer, they'd have to try to unload their shares on the open market. He has recently added to those comments in an investor note, in which he says that although a sale is the "preferred route" for Vivendi, there are no "readily apparent buyers."
He says that while some big game-related purchases have been made in the past, no deal has ever come close to reaching the astronomical numbers proposed with Activision. Furthermore, he notes that acquisitions by EA, Time Warner, and Disney typically stay below $1 billion, which is still a far cry from $8 billion. As for the console manufacturers, Pachter says they wouldn't want to "cannibalize" the franchise; one of the reasons CoD is the biggest name in gaming today is because it's available on multiple platforms. Heck, I coulda told you that.
So what's most likely? Well, the analyst says this could result in a "spinoff of Activision Blizzard," which would require some "fancy financing" but would manage to give Vivendi $5 billion in cash. And by the way, if you're looking into stocks, Activision might be a good idea, as their shares would rise by how much cash the company generates every year.
7/3/2012 9:22:49 AM Ben Dutka