Today, reports swirled that Vivendi Universal, the France-based parent company of publishing giant Activision-Blizzard, was looking to take roughly $3 billion in cash from its video game-making subsidiary in an effort to cover its €13 billion—or roughly $17.5 billion—debt.
According to GamesIndustry, Vivendi would look to extract “a $3 billion special dividend from Activision-Blizzard,” which is a little under 75 percent of the $4.3 billion in cash that the publisher has been stockpiling over several years of prosperous sales. However, because a significant portion of that cash is held in overseas accounts, bringing it back into the US into Activision’s coffers (for Vivendi to access) would subject it to U.S. repatriation taxes, which would obviously cost a pretty penny. The move would net Vivendi $2 billion, say the reports, leaving a good $15 billion of debt still left to be covered.
Adding another wrinkle to the situation is that, according to “other sources” cited by GamesIndustry, Activision CEO Bobby Kotick may want to use that money to buy out Vivendi’s stake in the publisher. The French conglomerate owns a 60 percent stake in the company, and while it’s unclear how much money it would take to free itself of Vivendi’s influence, it is clear that Activision would surely be better off spending that cash to rid itself of Vivendi’s money problems and machinations, rather than putting a drop in its debt-relief bucket.
In the end, however, Kotick may be forced to pay up to Activision’s corporate overlords. According to a post on Reuters, “six of eleven Activision board members are from Vivendi group or its units,” meaning if all six board members were unified in such a vote, Vivendi’s interests would carry the day. The post says that there’s a board meeting scheduled for later this week, so we could find out Activision’s financial fate very soon.
We’ll keep our eyes on the situation and update this story accordingly.