Vivendi Looking To Bleed Activision To Ease Debt

Six years ago,  Activision and Vivendi combined to create what was viewed, at the time, as one of the biggest mergers in industry history.  Vivendi’s prowess as a multimedia giant, along with their considerable assets, combined with Activision’s stable of cash cow franchises like Call of Duty and World of Warcraft, seemed, on paper, an almost unbeatable duo.  Fast-forward to today, however, and Activision isn’t so happy about the deal.

After failing to find a buyer in their 61% stake in Activision Blizzard, Vivendi finds themselves in an interesting position.  Since the merger, the rules have required Vivendi to have to persuade Activision Blizzards’s independent directors to agree to any asset transfer that would take their  net debt above $400 million, according to Reuters.  However, tomorrow marks the day that rule goes out of effect, meaning Vivendi, with their 61% stake in the company, could look to cut into Activision’s money to ease their own financial burden.

Obviously, this isn’t something Activision should be particularly thrilled with.  Speaking with Joystiq, industry analyst Michael Pachter imagines a scenario where Vivendi could borrow $5 billion in Activision’s name, then pay themselves the sizeable dividends from the loan.  Pachter estimates that Vivendi would  receive approximately $5.2 billion in cash from the company when it is all said and done, which would obviously cut into the strong financial outlook they announced earlier this year.