Vivendi May Sell Its $8.1 Billion Stake in Activision

Vivendi SA (VIV) Chairman Jean-Rene Fourtou said his company may sell its $8.1 billion stake in Activision Blizzard Inc. (ATVI), the largest U.S. video-game publisher.

“It’s a possibility,” Fourtou said today in an interview at the Allen & Co. media conference in Sun Valley, Idaho. Asked if he was trying to find a buyer for the 61 percent stake at the event, Fourtou said: “We’re always looking at opportunities for all of our businesses.’”

Vivendi, with interests in music and telecommunications, is canvassing video-game and entertainment companies for buyers, said three people with knowledge of the matter who sought anonymity because the effort is private. The Allen & Co. retreat, attended by major media and technology executives, is an ideal venue for such talks and has led to blockbuster deals in the past.

Walt Disney Co. (DIS), Microsoft (MSFT) Corp., China’s Tencent Holdings Ltd. (700) and Japan’s Nexon Co. (3659) are among the companies that have been approached, the people said.

Disney, the world’s largest entertainment company, is unlikely to bid for Activision, according to a person with knowledge of the company’s plans.

Microsoft, while approached, isn’t actively considering a bid, according to one person. That could change, the person said. The Redmond, Washington-based software company would have to consider that buying Activision may jeopardize sales of the company’s “Call of Duty” games to Sony Corp. (6758) and Nintendo Co.

Cash Sale

Wayne Hickey, an outside spokesman for Microsoft, declined to comment. Catherine Chan, a spokeswoman for Tencent, didn’t respond to an e-mail seeking comment outside of normal business hours in China. John Christiansen, an outside spokesman with Sard Verbinnen & Co. representing Nexon, declined to comment.

Paris-based Vivendi is seeking a cash sale, one person said. That could complicate deals with Tencent and Nexon, which don’t have sufficient holdings for such a purchase.

Vivendi will consider selling Activision shares on the market if it can’t find a buyer, a person with knowledge of the matter said previously. The French company is planning to make some announcements about its strategy when it reports first-half earnings on Aug. 30, a person familiar with the matter said.

Fourtou made his comments today after talking with Activision CEO Bobby Kotick at the conference. Fourtou declined to speak on any discussions with other attendees. Kotick, who has led Activision for at least 20 years, also declined to comment.

CEO Search

Vivendi is searching for a new CEO and is re-evaluating its businesses after the departure last month of Jean-Bernard Levy in a clash over the direction of the company. Levy’s successor will help Fourtou, who now oversees strategy, overhaul Vivendi’s structure and restore investor confidence after the stock fell to a nine-year low in April.

Activision, the Santa Monica, California-based publisher of the “World of Warcraft” online games, fell 0.5 percent to $11.90 at the close in New York. Vivendi gained 2.4 percent to 15.24 euros in Paris.

Moody’s Investors Service and Fitch Ratings warned the French company last month its debt ratings may be cut unless the company reduces liabilities. Vivendi’s net debt totaled about 12.5 billion euros at the end of March.

Activision Value

Activision trades at 14.3 times trailing earnings, according to data compiled by Bloomberg, below the 25.4 in fiscal 2010 and a five-year of high of 67.6 in 2007. The company had $3.48 billion in cash and no debt as of the first quarter, according to company filings.

The multiple reflects investor uncertainty over growth prospects during a transition phase for the video-game industry with the introduction of the first new consoles in seven years, Edward Woo, an analyst with Ascendiant Capital Markets LLC in Irvine, California, said in a recent interview.

Industry growth is now taking place on social-media websites such as Facebook.com and away from traditional family room consoles from Microsoft, Sony and Nintendo. U.S. sales of packaged games like those played on Xbox or PlayStation fell 6 percent to $8.83 billion last year, according to researcher NPD Group Inc.

To contact the reporters on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net; Cliff Edwards in San Francisco at cedwards28@bloomberg.net; Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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