RLPC: Activision adjusts structure on $5B financing package

NEW YORK, Sept 10 Tue Sep 10, 2013 1:59pm EDT

NEW YORK, Sept 10 (Reuters) - Activision Blizzard Inc adjusted the structure on the $5 billion financing package backing the company's plan to spin itself off from Vivendi and buy back shares, sources told Thomson Reuters LPC.

Bank of America Merrill Lynch and JP Morgan lead the deal.

The company is now proposing a $2.5 billion, seven-year covenant-lite term loan B, versus $2.25 billion, previously. The company is also planning a $250 million revolving credit facility.

In addition, the company increased its planned eight-year note issuance by $500 million to $1.5 billion, and upsized its proposed 10-year note issuance by $250 million to $750 million. The company has cancelled a $1 billion, seven-year note previously in market.

Price talk on the TLB is unchanged at LIB+275-300, with a 75bp Libor floor and a 99.5 original issue discount. The TLB will carry 101 soft call protection for six months.

Indicative pricing on the eight-year notes is 5.75-6 percent, while the 10-year notes are guided at 6.25-6.5 percent.

Activision plans to fund the purchase of 429 million of its shares from Vivendi with a combination of $1.2 billion in cash on hand and new debt, according to a company filing. The transaction is expected to close by the end of September. Activision is buying the shares back for $5.83 billion, or $13.60 per share.

Separately, Activision CEO Bobby Kotick and Co-Chairman Brian Kelly will purchase 172 million shares for $2.34 billion. After the transaction, Vivendi will no longer be the majority shareholder, but will retain a stake of 83 million shares, or approximately 12 percent.

Activision Blizzard Inc is a worldwide online, personal computer, video game console, handheld, and mobile game publisher.

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