176
Annual Report -
2013
-
Vivendi
Financial Report
| Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
4
SECTION 1 - Significant events
1.1.2.
Planned demerger of the group
1.1.3.
Sales of Activision Blizzard and Maroc Telecom Group
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1.1.3.1. Activision Blizzard
On October 11, 2013, Vivendi completed the sale of 88% of its interest
in Activision Blizzard, or 600.64 million shares priced at $13.60 per
share, for $8,169 million (€6,044 million) in cash.
The key terms of this sale are as follows:
through the acquisition of a Vivendi subsidiary, Activision Blizzard
repurchased 428.68 million shares at $13.60 per share for a cash
consideration of $5,830 million;
concomitantly, Vivendi sold 171.97 million Activision Blizzard shares
at $13.60 per share for a cash consideration of $2,339 million to
an investor group (ASAC II LP) led by Mr. Robert Kotick, Activision
Blizzard’s Chief Executive Officer, and Mr. Brian Kelly, the Chairman
of the Board of Directors. ASAC II LP owns approximately 24.7%
of the outstanding share capital (following the repurchase of
428.68 million shares by Activision Blizzard);
pursuant to the simultaneous closings of both sales on October 11,
2013, Vivendi retained 83 million Activision Blizzard shares,
representing 11.9% of Activision Blizzard’s outstanding share capital
(following the repurchase of 428.68 million shares by Activision
Blizzard). Vivendi’s remaining ownership interest is subject to a
staggered 15-month lock-up period as described in Note 7 to the
Consolidated Financial Statements for the year ended December 31,
2013. The sale proceeds from the remaining ownership interest
are estimated at a total of $1,129 million (€832 million), assuming
the hypothesis of $13.60 per share and at $1,480 million
(€1,078 million), assuming the hypothesis of Activision Blizzard’s
share price on December 31, 2013 of $17.83 per share; and
the agreement governing the transaction includes certain
continuing commitments given by the parties (please refer to Note 7
to the Consolidated Financial Statements for the year ended
December 31, 2013).
Deconsolidation of Activision Blizzard as from
October 11, 2013
As from October 11, 2013, as a result of the sale of 600.64 million
shares of, or a 53.46% interest in Activision Blizzard, Vivendi lost control
of and deconsolidated Activision Blizzard. In the Consolidated Financial
Statements for the year ended December 31, 2013, the remaining
83 million Activision Blizzard shares have been recorded as assets held
for sale, subject to the staggered lock-up period.
Capital gain on divestiture
From an accounting perspective and in accordance with IFRS, Vivendi
is considered to have sold 100% of its interest in Activision Blizzard
following the loss of control of this subsidiary. The gain on sale has
been determined as the difference between the value of 100% of the
Activision Blizzard shares owned by Vivendi at a price of $13.60 per
share (less costs to sell) (€6,851 million) and the value of Activision
Blizzard’s net assets attributable to Vivendi SA shareowners, as
recorded in Vivendi’s Consolidated Financial Statements at the date of
the loss of control (€4,491 million). Moreover, in accordance with IFRS,
foreign currency translation adjustments attributable to Vivendi SA
shareowners in relation to Activision Blizzard have been reclassified to
profit or loss, i.e., a gain of €555 million. Thus the total capital gain on
the divestiture which amounted to €2,915 million with no tax impact,
has been recognized in the Consolidated Statements under the line
“Earnings from discontinued operations”.
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1.1.3.2. Maroc Telecom Group
On November 4, 2013, Vivendi entered into a definitive agreement with
Etisalat, with whom exclusive negotiations had begun on July 22, 2013,
regarding the sale of Vivendi’s 53% interest in Maroc Telecom Group.
The key terms of this agreement known to date are as follows:
the agreement values the interest in Maroc Telecom Group at
MAD 92.6 per share or sale proceeds to Vivendi of approximately
€4.2 billion in cash, including a €310 million dividend distribution
with respect to fiscal year 2012, according to the financial terms
known to date. Taking into account Maroc Telecom Group’s Net
Debt, the transaction reflects a proportional enterprise value of
€4.5 billion for Vivendi’s interest, equal to an EBITDA multiple of
6.2x; and
the completion of this transaction is contingent upon the
satisfaction of certain closing conditions, including receipt of
required regulatory approvals in Morocco and the countries in
which Maroc Telecom Group operates, as well as finalization of
the shareholders’ agreement between Etisalat and the Kingdom of
Morocco. This transaction is expected to be completed during the
first months of 2014.
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1.1.3.3. Accounting implications in the
Consolidated Financial Statements
As from the second quarter of 2013, and in compliance with IFRS 5
taking into account the anticipated closing dates of the effective sales,
Activision Blizzard and Maroc Telecom Group have been reported in
Vivendi’s Consolidated Statement of Earnings, Statement of Cash Flows,
and Statement of Financial Position as discontinued operations.
On November 26, 2013, Vivendi’s Supervisory Board approved the
group’s planned demerger to form two separate companies: (i) a new
international media group based in France, with very strong positions
in music (as the worldwide leader), in European cinema, in pay-TV in
France, Africa, Vietnam, and Poland, and in the Internet and associated
services in Brazil, and (ii) SFR. The decision to implement this project
could be taken in the near future and, if appropriate, submitted to the
General Shareholders’ Meeting for approval on June 24, 2014.
Vivendi considers that the conditions for the application of IFRS 5 to
the proposed demerger in the 2013 Financial Statements are not met.
