MergerMarket
* 50% acceptance condition cannot be waived
* Activision Blizzard, Viacom and Electronics Arts seen as potential white knights
Vivendi [EPA:VIV] is unlikely to increase its proposed takeover offer for Gameloft [EPA:GFT] in the absence of a rival bid, according to a source close and a banker following the situation.
On 4 March, the French media group increased its offer from EUR 6 per share to EUR 7.20, following a stake increase by the Guillemot family to 21.23%. Gameloft shares are currently trading at EUR 7.41, giving it a market capitalisation of EUR 633.3m.
Vivendi’s offer is conditional on at least 50% acceptance, which cannot be waived, confirmed the source and a spokesperson for Vivendi.
Vivendi can certainly increase its bid should it need to, the source said. But, at this stage, there has not been a counter offer so it does not need to bump its offer.
Vivendi has already set the bar quite high and there is still a long way to go before the closing of the transaction, so they will wait until the last minute to increase the offer if necessary, the banker following said he believed.
Vivendi is currently waiting for French stock market regulator Autorité des marchés financiers (AMF) to approve its tender offer, with a decision expected on 15 March, the source said.
Gameloft’s founding Guillemot family has options to fight back, either by launching its own offer or by seeking a white knight. The family is rumoured to be seeking a white knight to launch a rival bid, as previously reported by this news service.
Support for a rival bid could come from anyone from the industry, and particularly from firms like Activision Blizzard [NASDAQ:ATVI], a lawyer following the situation said. But the banker saw US industry players Electronic Arts [NASDAQ:EA] or Viacom [NASDAQ:VIAB] as better fits to submit a rival bid.
However, finding a white knight might turn out to be challenging for Gameloft shareholders, the source believed.
The Guillemot family has been trying to find a white knight since October when Vivendi started to increase its stake, but to no avail so far, this source pointed out. It seems a lot less appealing for a white knight to come on board now that the company is worth a lot more and Vivendi holds a larger stake. Gameloft shares were trading at as low as EUR 4.20 in October.
But, the market has not ruled out a rival offer, judging by Gameloft’s shares, which are trading above the offer price, the banker said.
Any white knight would usually come in towards the end of an offer, maybe days before it closes, the banker believed.
Vivendi and Gameloft declined to comment.