Bloomberg is reporting that Activision-Blizzard's top stakeholder Vivendi SA has failed to obtain a new line of credit worth an estimated €1 billion. According to multiple sources with "knowledge of the negotiations," the credit deal fell through mostly because of wary investors who are dealing with the mounting pressure from the European debt crisis. Vivendi SA was asked to pay an interest rate of 90 basis points above the Euro interbank offered rate, but the company held firm with its offer of 75 basis points.
According to data compiled by Bloomberg, the average interest rate for French investment-grade companies increased from 48.8 basis points to 60 in the first eight months of 2011. Given the financial atmosphere in the region, this is not surprising at all. Vivendi is reportedly looking for a better line of credit following an agreement it signed last month to pay £1.2 billion for the recorded assets of the EMI Group.
In November, Vivendi sold 35 million shares in Activision-Blizzard for a reported $425 million. At the time the company said that the decision was a "tactical disposal with regards to our overall capital structure." The company claims that it is committed to remaining the majority shareholder in the publisher.