Vivendi Universal for sale? (Blizzard, Valve etc....) (1 Viewer)

[Romier S]

Im my usual scouring of the net I ran across a few articles today with news of Vivendi considering selling its videogames developement houses to make up for a 16.5 billion dollar debt. Here is one article from Bloomberg:

Reuters Company News
Videogame sale talk buoys Vivendi Universal
By Caroline Brothers
(Updates with shares, analyst views, paragraphs 2-3, 20-21, 23)
PARIS, Aug 7 (Reuters) - Battered shares in media giant Vivendi Universal (Paris:EAUG.PA - News; NYSE:V - News) added as much as seven percent on Wednesday after a report it may sell its U.S.-based videogame businesses and keep mobile phones unit Cegetel, analysts said.
two top gainers on the Paris blue chip index by 1101 GMT, when it was up 5.43 percent at 16.30 euros.
It outpaced a 0.41 percent rise on the European media index, but Vivendi volumes were thin, exaggerating the price move.
Wednesday's Wall Street Journal quoted sources close to the matter as saying that the world's second-biggest media company was mulling the sale of its U.S.-based videogames software business that could net it 2.0 billion euros ($1.94 billion).
That, plus comments that Vivendi's new Chief Executive Jean-Rene Fourtou was leaning away from a sale of its 44 percent stake in mobile telecoms operator Cegetel, powered the share rise, traders said. Generally firmer markets also helped.
"Many investors think that selling the videogames business would be a good idea as it would allow the group to significantly cut its debt and at the same time keep hold of its golden egg Cegetel," a Paris-based dealer said.
Another said the unit, which includes Universal Interactive, Blizzard Entertainment and Sierra Entertainment, was a solid asset easily sold. "If it's for sale, Microsoft (NasdaqNM:MSFT - News) and Sega (Tokyo:7964.T - News) would be idiots not to take a look," he said.
But CSFB analyst Michael Picken tempered market optimism by saying everything depended on how Vivendi used the cash.
"If they got a good price for the videogames unit and used it to pay down debt, that would be good news. But if they use it to buy a bigger stake in Cegetel it would be more of the same -- selling low and buying high," he said.
The world's biggest media empire after AOL Time Warner (NYSE:AOL - News) has lost 73 percent of its market value this year on worries about its strategy and bloated debt.
Former chairman Jean-Marie Messier, recently ousted in a boardroom coup, had considered the videogames business a prime example of the synergies his media empire could achieve.
CRASH BANDICOOT, LORD OF THE RINGS
But his successor Fourtou does not agree the business is central to Vivendi's strategy, despite a 15 percent operating margin that makes it one of the most profitable in its sector, according to group publishing chief Agnes Touraine.
"Games are the icing on the cake. They are nice to have, but you do not lose any coherence if you sell them," the WSJ quoted one person familiar with Fourtou's view as saying.
The WSJ quoted people close to the issue as saying that Fourtou had not yet made a formal decision over the videogames branch and was still weighing other options.
However they added that he had identified the business, whose three studios together have annual turnover of $600 million, as non-core and expendable.
Some analysts were sceptical over the two billion euro price tag on the videogames business.
"The valuation appears a bit excessive, though it's true they have very nice studios.... with very nice games like "Warcraft", "Crash Bandicoot" and licences such as "Lord of the Rings" and "Bruce Lee". But three times turnover is clearly more than the sector average of 1.5 times," one analyst said.
"One could reasonably envisage two billion euros but I would guess it would be more likely a bit more than one billion," added Sylvie Sejournet at Fortis Securities.
Analysts, fearing a bargain basement price, were relieved by suggestions that Fourtou was leaning away from selling the Cegetel stake that they value at 5-7 billion euros.
"People know (Cegetel) is not an easy asset to sell because of the lock-up agreement and a complicated shareholder structure and even if it could, Vivendi would not sell it in current market conditions," Bear Stearns analyst Jens Jantzen said.
He was referring to a five-year stay on any share transfer enjoyed by fellow Cegetel shareholders British Telecom (London:BT.L - News) and SBC (NYSE:SBC - News) that expires in the third week of September.
A Vivendi spokeswoman declined to comment on what assets the company might off-load and company officials were not immediately available for further comment.
"If the transaction goes through, that will be a good thing but Vivendi will still need to do more to solve its debt and cash situation," said one analyst, adding the group would still require its recently won 2.8 billion euro bank facility.
(Additional reporting by Nathalie Meistermann, Marie Maitre and Rebecca Harrison)

As always none of this is definite and may just go away. Seems interesting to me nonetheless.
Lead company rumored to be the front runners in the buyout are the Sony corp, Sega Corp and Microsoft corp....

 

[JohnE]

I'd put my money on MS. I could see that working out well.

 

[DaveF]

Perhaps we at HTF could pool our resources and buy Blizzard. It's a deal at twice the cost!

 

[Romier S]

Perhaps we at HTF could pool our resources and buy Blizzard

We could have World Of Warcraft all to ourselves