Vivendi sells $427 million stake in Activision

Vivendi has sold a $427 million stake in Activision Blizzard, maker of the Call of Duty video game, raising questions about whether the French group has been stretched more than it has admitted by the $1.9 billion purchase of EMI’s recorded music division.

The French media and telecoms group denied that the surprise sale of the 3 percent holding in one of its prized assets had been prompted by rating agency worries about the deteriorating conditions in European credit markets.

Vivendi also rejected suggestions that the sale was linked directly to the EMI deal, which was confirmed at the end of last week. It said the disposal, which cuts its holding in Activision from 63 per cent to 60 per cent, was “tactical” and had to do with improving the French company’s “overall capital structure”. The sale would bring its holding to the same level as at the start of this year, Vivendi added. However, media analysts at Bernstein Research said it was “quite natural” to connect the sale with the EMI purchase by Vivendi’s Universal Music and that the company’s desire to maintain its cherished triple-B credit rating could have encouraged it to “produce more hard cash”.