Vivendi to Buy Activision Stake, Forming Game Venture
By Jennifer Sondag
Dec. 2 (Bloomberg) -- Vivendi SA agreed to buy a controlling stake in Activision Inc. for $9.8 billion to create the world's largest maker of video games.
Vivendi will contribute its $8.1 billion video-game business and pay $1.7 billion in cash for a 52 percent stake in the combined company, Vivendi and Activision said in a statement today. The new company will make an offer to buy back as much as $4 billion in shares at $27.50 each, or 24 percent more than Activision's closing price on Nov 30.
The merged company, called Activision Blizzard, will bring together Vivendi's top-selling online game ``World of Warcraft'' with the ``Guitar Hero'' and ``Call of Duty'' franchises owned by Santa Monica, California-based Activision. The venture will have about $3.8 billion in sales this year on a pro-forma basis, the companies said, surpassing market leader Electronic Arts Inc.
``There is a competitor now to Electronic Arts,'' said Michael Pachter, an analyst at Wedbush Morgan Securities in Los Angeles. ``There is no more clear No. 1 and clear No. 2 company. There are now two guys that are dominant.'' He rates Activision ``strong buy'' and doesn't own the shares.
The new company will trade on the Nasdaq Stock Market under Activision's ATVI symbol. Activision rose 18 cents to $22.15 on the Nasdaq Nov. 30. Paris-based Vivendi advanced 49 cents to 31.39 euros, giving the company a market value of 36.5 billion euros ($53.7 billion).
Higher Earnings
The venture will add to earnings per share in its first year after the transaction closes, the companies said. Activision Blizzard targets operating income of $1.1 billion and earnings of $1.20 a share for 2009.
Activision Chief Executive Officer Robert Kotick will stay in his role at Activision Blizzard. Bruce Hack, CEO of Vivendi Games, will become vice chairman and lead the merger integration.
``We are demonstrating a commitment to the games business,'' Vivendi Chief Executive Officer Jean-Bernard Levy said in an interview.
Kotick said in an interview that he approached Hack about a year ago to discuss a deal. After the two had lunch together, Levy traveled to Santa Monica.
``Both of our businesses strengthened as we got through the year,'' Kotick said. He said he started the talks because Activision considered Vivendi's online gaming unit and its growth in Asia ``impossible to duplicate.''
Raising Forecasts
On Nov. 27, Activision raised its profit and sales forecasts for this quarter on demand for its latest ``Guitar Hero'' game. ``Guitar Hero III: Legends of Rock,'' released in October, was last month's best-selling title for Nintendo Co.'s Wii and Sony Corp.'s PlayStation 2 and PlayStation 3 consoles, according to research firm NPD Group Inc., based in Port Washington, New York.
The games unit is Vivendi's fastest-growing business, and the smallest by revenue. Earnings before interest, taxes and amortization jumped 71 percent in the third quarter to 41 million euros. Games accounted for 4.5 percent of Vivendi's sales in the first nine months of the year.
The global video-game industry will grow an average of 9.1 percent annually to reach $48.9 billion in 2011, trade publication Hollywood Reporter said in June, citing a report by PricewaterhouseCoopers. That's faster than the 6.4 percent growth rate for the overall entertainment industry, the report said.
New Shares
Vivendi will receive 295.3 million new shares of the combined company in return for its games business, and will pay $1.7 billion in cash, or $27.50 a share for another 62.9 million shares. The deal values Vivendi's games business at about $8.1 billion based on the per-share price. On that basis, the combined company would be valued at $18.9 billion, Activision and Vivendi said.
Activision Blizzard will use cash on hand, including the $1.7 billion from Vivendi, to pay for shares in the tender offer, the companies said. Vivendi can buy as much as $700 million in additional stock, the proceeds of which also would be used for the buyback. Activision Blizzard will borrow any remaining cash needed for the buyback from Vivendi or lenders.
If shareholders tender the $4 billion in shares, Vivendi's stake in Activision Blizzard will increase to 68 percent.
Kotick said there will be savings from integrating the companies' sales teams and corporate functions. He said employment overall will increase after five years.
Largest Business
SFR, France's second-biggest provider of mobile-phone services, is Vivendi's largest business. It accounted for 42 percent of revenue in the first nine months. The company's other operations include Universal Music Group, the world's biggest music company, and pay-television company Canal Plus.
This month, Vivendi reported its first drop in profit in seven quarters because of sliding sales of compact discs and the dollar's decline against the euro. Third-quarter profit excluding one-time gains and some costs fell 1.4 percent to 721 million euros.
Pachter said it made sense for Vivendi to combine with Activision rather than Electronic Arts because Vivendi wouldn't have been able to buy control of EA for the same price.
Electronic Arts, the maker of the ``Madden NFL 08'' and ``NFL Football 08'' games, last month reported a second-quarter loss on costs to make and advertise the football games. The company is spending more to attract buyers to games made for new consoles, including Xbox 360 and Wii. Electronic Arts has a market value of $17.7 billion.
Risen This Year
Activision has risen 28 percent this year in Nasdaq trading, beating the 9.8 percent increase in a Standard & Poor's index of entertainment software stocks. The company had a market value of $6.5 billion as of Nov. 30.
Vivendi has gained 6 percent for the year, outpacing the 9 percent drop in the Bloomberg Europe Media Index and the 2.3 percent gain in France's benchmark CAC 40 Index.
Allen & Co. LLC advised Activision on the transaction, and Goldman, Sachs & Co. advised Vivendi. Activision also used Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel, while Gibson, Dunn & Crutcher LLP acted as counsel to Vivendi.
Vivendi and Activision plan to complete the deal in the first half of next year.
Vivendi owns 20 percent of NBC Universal Inc., the parent of the NBC television network in the U.S. General Electric Co. owns the rest.
BLOOMBERG
Economy | Business | Social | Leaked | Opinions
Sunday, December 2, 2007
Cyprus growth rate to be around 4% for 2008
Cyprus growth rate to be around 4% for 2008
The growth rate of the Cypriot economy, due to external factors, is expected to be maintained in 2008 within the levels of the past few years, that is around 4%, while employment will continue to increase and unemployment decrease to 3.9%, according to Cypriot Minister of Finance Michalis Sarris, who noted that the creation of new jobs would continue due to the improvement of the business environment and the confidence created by the adoption of the Euro on 1 January 2008.
Speaking before the plenary of the House of Representatives, which discussed the state budget for 2008, Sarris said the inflation rate would be around 2.5% as a result of the high prices of fuel.
Furthermore, the public surplus is estimated to be around 0.5% of GDP. The decrease in the surplus compared to 2007 is due to the temporary nature of part of income for 2007, recent tax reductions, and the full implementation of social cohesion measures.
Public debt will drop below 50%, thus breaking the barrier of 60%, which was an important commitment for entering the Eurozone.
Sarris said these projections are based on the evaluation that there will be no unforeseen events that would have a toll on the economy and public finances, such as drastic increases in the price of crude oil and geopolitical tension in the region.
In his speech, Sarris noted that ''the implementation of a correct financial policy by the Government contributed to the establishment of a robust economy, which is characterised by high growth and employment rates, and the strengthening of the welfare state.''
''We managed to create a sound basis on which we will successfully build after our accession to the EMU, a policy to the success of which all parties participating in the Government contributed to. We will remain focused on the successful policy of the past few years with the ultimate aim of social progress and the welfare of the citizens,'' Sarris said.
Referring to Cyprus' accession to the Eurozone on 1 January 2008, Sarris said this would enhance economic and social progress, and would bring about specific and tangible benefits for the citizens.
Sarris noted that the Government was implementing an action plan for the adoption of the Euro, based on the previous experience of other EU member states.
On the state budget for 2008, the Minister of Finance said it continues to serve the ambitious fiscal aims set by the Government and will enhance social cohesion and the growth policy.
He pointed out that emphasis has been given to the sectors of health, education, energy, road safety and social cohesion, which have been recording increased needs in funds.
Sarris said the budget provided for an increase in net income by 4.9% compared to the revised income for 2007, while the net public expenditure would rise at a reduced rate of 7.7%, compared to 14.8% in 2007.
Development expenditure for 2008 is calculated at 553.2 million Cyprus pounds (one Cyprus pound is trading at approximately 1.7 Euros), compared to 433.7 million pounds in 2007, with increased credit for education, health, projects concerning energy, the development of technological parks, the attraction of foreign investment, the protection of the environment, the sanitary disposal of waste and infrastructure works.
Sarris said the social character of the budget is reflected in the significant increase of social benefits, noting that the Government has enhanced social cohesion by implementing a series of measures over the past few years to improve the standard of living of vulnerable groups of the population.
FINANCIAL MIRROR
The growth rate of the Cypriot economy, due to external factors, is expected to be maintained in 2008 within the levels of the past few years, that is around 4%, while employment will continue to increase and unemployment decrease to 3.9%, according to Cypriot Minister of Finance Michalis Sarris, who noted that the creation of new jobs would continue due to the improvement of the business environment and the confidence created by the adoption of the Euro on 1 January 2008.
Speaking before the plenary of the House of Representatives, which discussed the state budget for 2008, Sarris said the inflation rate would be around 2.5% as a result of the high prices of fuel.
Furthermore, the public surplus is estimated to be around 0.5% of GDP. The decrease in the surplus compared to 2007 is due to the temporary nature of part of income for 2007, recent tax reductions, and the full implementation of social cohesion measures.
Public debt will drop below 50%, thus breaking the barrier of 60%, which was an important commitment for entering the Eurozone.
Sarris said these projections are based on the evaluation that there will be no unforeseen events that would have a toll on the economy and public finances, such as drastic increases in the price of crude oil and geopolitical tension in the region.
In his speech, Sarris noted that ''the implementation of a correct financial policy by the Government contributed to the establishment of a robust economy, which is characterised by high growth and employment rates, and the strengthening of the welfare state.''
''We managed to create a sound basis on which we will successfully build after our accession to the EMU, a policy to the success of which all parties participating in the Government contributed to. We will remain focused on the successful policy of the past few years with the ultimate aim of social progress and the welfare of the citizens,'' Sarris said.
Referring to Cyprus' accession to the Eurozone on 1 January 2008, Sarris said this would enhance economic and social progress, and would bring about specific and tangible benefits for the citizens.
Sarris noted that the Government was implementing an action plan for the adoption of the Euro, based on the previous experience of other EU member states.
On the state budget for 2008, the Minister of Finance said it continues to serve the ambitious fiscal aims set by the Government and will enhance social cohesion and the growth policy.
He pointed out that emphasis has been given to the sectors of health, education, energy, road safety and social cohesion, which have been recording increased needs in funds.
Sarris said the budget provided for an increase in net income by 4.9% compared to the revised income for 2007, while the net public expenditure would rise at a reduced rate of 7.7%, compared to 14.8% in 2007.
Development expenditure for 2008 is calculated at 553.2 million Cyprus pounds (one Cyprus pound is trading at approximately 1.7 Euros), compared to 433.7 million pounds in 2007, with increased credit for education, health, projects concerning energy, the development of technological parks, the attraction of foreign investment, the protection of the environment, the sanitary disposal of waste and infrastructure works.
Sarris said the social character of the budget is reflected in the significant increase of social benefits, noting that the Government has enhanced social cohesion by implementing a series of measures over the past few years to improve the standard of living of vulnerable groups of the population.
FINANCIAL MIRROR
Ρεκόρ κερδοφορίας για Κύρια Αγορά - Κέρδη εννιαμήνου €1,09 δις. σε σχέση με €463,2 εκατ. πέρυσι
Ρεκόρ κερδοφορίας για Κύρια Αγορά
Κέρδη εννιαμήνου €1,09 δις. σε σχέση με €463,2 εκατ. πέρυσι
Σε νέο ιστορικό ρεκόρ οδεύουν οι εισηγμένες εταιρείες της Κύριας Αγοράς, εκτός ελαχίστων εξαιρέσεων, καθώς η κερδοφορία στο εννιάμηνο έχει φθάσει στο 1,09 δισ. ευρώ σε σχέση με 463,2 εκατ. ευρώ που παρουσίασαν το περσινό διάστημα. Το ασύλληπτο ρεκόρ κερδοφορίας που παρουσιάζουν οι εταιρείες της Κύριας Αγοράς οφείλεται στην ισχυρή κερδοφορία που δείχνουν οι τράπεζες καθώς διανύουν μια από τις καλύτερες εποχές τους.
Σύμφωνα με τα στοιχεία της συγκεκριμένης Αγοράς, οι τράπεζες για ακόμη μια χρήση έχουν την τιμητική τους και ο πήχης των προσδοκιών των διοικήσεών τους ανεβαίνει συνεχώς. Κερδοφορία που πάει να αγγίξει το 1 δις. ευρώ εμφάνισαν στο εννιάμηνο με αποτέλεσμα το 80% των κερδών της Κύριας Αγοράς να προέρχεται από τον τραπεζικό τομέα, δίνοντας τον τόνο όχι μόνο στο Χρηματιστήριο αλλά και στο σύνολο της οικονομίας ειδικότερα. Οι κυπριακές τράπεζες δεν έχουν έκθεση σε subprime δάνεια ενώ αντιθέτως κινούνται για επέκταση σε αγορές που παρουσιάζουν συνεχώς ενδιαφέρον και τα σχέδια αρχίζουν και υλοποιούνται.
Οι καλές επιδόσεις των τραπεζών αναμένονται να συνεχιστούν και τα επόμενα χρόνια με πιο μετριοπαθείς ίσως τόνους αλλά το θετικό κλίμα σύμφωνα με τα business plan που δημοσίευσαν ή θα δημοσιεύσουν ενισχύει την αισιοδοξία που υπάρχει. Τα έκτακτα αποτελέσματα υπάρχουν σχεδόν για όλες τις εταιρείες αλλά σε γενικές γραμμές η εικόνα που παρουσιάζεται στο εννιάμηνο είναι ιδιαίτερα θετική. Στο πάρτι της κερδοφορίας δεν παίρνουν μέρος όλες οι εταιρείες είτε γιατί συντρέχουν συγκυριακοί παράγοντες που επηρεάζουν τα κέρδη τους είτε γιατί οι συνθήκες της αγοράς εντείνουν τον ανταγωνισμό με αποτέλεσμα το επιχειρηματικό περιβάλλον να μεταφέρεται στους λογαριασμούς τους. Σύμφωνα με τα στοιχεία που παρουσιάζονται μπορεί οι εταιρείες της Κύριας Αγοράς να μην παρουσίασαν ζημιές αλλά ορισμένες εισηγμένες είδαν τα κέρδη τους να μειώνονται.
ΑΠΟΤΕΛΕΣΜΑΤΑ ENNEAMHNOY ΚΥΡΙΑΣ ΑΓΟΡΑΣ
2007 2006
Τράπεζα Κύπρου 370.000.000 223.000.000
Marfin Popular Bank 483.000.000 107.176.000
Eλληνική Τράπεζα 105.905.000 34.783.000
SFS 22.857.122 8.436.416
CTC 6.935.295 5.665.O61
Woolworth 11.874.000 4.729.000
Aspis 17.381.860 260.760
Tsokkos Hotels 8.755.077 7.759.447
Τσιμεντοποϊια Βασιλικού 11.815.000 9.739.000
Vision International 5.126.923 6.932.840
Ορφανίδης 1.591.232 3.805.820
Options Cassoulides 1.272.520 2.059.474
Muskita 8.046.182 6.817.380
Louis 30.856.000 34.542.000
Logicom 5.347.221 4.486.695
Zoρπάς 2.326.000 3.024.000
Ποσά σε ευρώ, τα στοιχεία είναι από τους λογαριασμούς των εταιρειών.
ΦΙΛΕΛΕΥΘΕΡΟΣ
Κέρδη εννιαμήνου €1,09 δις. σε σχέση με €463,2 εκατ. πέρυσι
Σε νέο ιστορικό ρεκόρ οδεύουν οι εισηγμένες εταιρείες της Κύριας Αγοράς, εκτός ελαχίστων εξαιρέσεων, καθώς η κερδοφορία στο εννιάμηνο έχει φθάσει στο 1,09 δισ. ευρώ σε σχέση με 463,2 εκατ. ευρώ που παρουσίασαν το περσινό διάστημα. Το ασύλληπτο ρεκόρ κερδοφορίας που παρουσιάζουν οι εταιρείες της Κύριας Αγοράς οφείλεται στην ισχυρή κερδοφορία που δείχνουν οι τράπεζες καθώς διανύουν μια από τις καλύτερες εποχές τους.
Σύμφωνα με τα στοιχεία της συγκεκριμένης Αγοράς, οι τράπεζες για ακόμη μια χρήση έχουν την τιμητική τους και ο πήχης των προσδοκιών των διοικήσεών τους ανεβαίνει συνεχώς. Κερδοφορία που πάει να αγγίξει το 1 δις. ευρώ εμφάνισαν στο εννιάμηνο με αποτέλεσμα το 80% των κερδών της Κύριας Αγοράς να προέρχεται από τον τραπεζικό τομέα, δίνοντας τον τόνο όχι μόνο στο Χρηματιστήριο αλλά και στο σύνολο της οικονομίας ειδικότερα. Οι κυπριακές τράπεζες δεν έχουν έκθεση σε subprime δάνεια ενώ αντιθέτως κινούνται για επέκταση σε αγορές που παρουσιάζουν συνεχώς ενδιαφέρον και τα σχέδια αρχίζουν και υλοποιούνται.
Οι καλές επιδόσεις των τραπεζών αναμένονται να συνεχιστούν και τα επόμενα χρόνια με πιο μετριοπαθείς ίσως τόνους αλλά το θετικό κλίμα σύμφωνα με τα business plan που δημοσίευσαν ή θα δημοσιεύσουν ενισχύει την αισιοδοξία που υπάρχει. Τα έκτακτα αποτελέσματα υπάρχουν σχεδόν για όλες τις εταιρείες αλλά σε γενικές γραμμές η εικόνα που παρουσιάζεται στο εννιάμηνο είναι ιδιαίτερα θετική. Στο πάρτι της κερδοφορίας δεν παίρνουν μέρος όλες οι εταιρείες είτε γιατί συντρέχουν συγκυριακοί παράγοντες που επηρεάζουν τα κέρδη τους είτε γιατί οι συνθήκες της αγοράς εντείνουν τον ανταγωνισμό με αποτέλεσμα το επιχειρηματικό περιβάλλον να μεταφέρεται στους λογαριασμούς τους. Σύμφωνα με τα στοιχεία που παρουσιάζονται μπορεί οι εταιρείες της Κύριας Αγοράς να μην παρουσίασαν ζημιές αλλά ορισμένες εισηγμένες είδαν τα κέρδη τους να μειώνονται.
ΑΠΟΤΕΛΕΣΜΑΤΑ ENNEAMHNOY ΚΥΡΙΑΣ ΑΓΟΡΑΣ
2007 2006
Τράπεζα Κύπρου 370.000.000 223.000.000
Marfin Popular Bank 483.000.000 107.176.000
Eλληνική Τράπεζα 105.905.000 34.783.000
SFS 22.857.122 8.436.416
CTC 6.935.295 5.665.O61
Woolworth 11.874.000 4.729.000
Aspis 17.381.860 260.760
Tsokkos Hotels 8.755.077 7.759.447
Τσιμεντοποϊια Βασιλικού 11.815.000 9.739.000
Vision International 5.126.923 6.932.840
Ορφανίδης 1.591.232 3.805.820
Options Cassoulides 1.272.520 2.059.474
Muskita 8.046.182 6.817.380
Louis 30.856.000 34.542.000
Logicom 5.347.221 4.486.695
Zoρπάς 2.326.000 3.024.000
Ποσά σε ευρώ, τα στοιχεία είναι από τους λογαριασμούς των εταιρειών.
ΦΙΛΕΛΕΥΘΕΡΟΣ
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