There may be new skepticism about Microsoft’s acquisition of Activision Blizzard, based on signs from Wall Street. It comes amid a prediction that US President Joe Biden’s antitrust enforcers could eventually derail the pending deal. Shareholders will vote today on whether or not the company should sell, which if successful will see Microsoft pay $95 per share or $75 billion in total for the sale.
Activision Blizzard has faced a tough time, with declining Call of Duty revenue and sales, and the loss of 60 million players in a year, which could hurt investor confidence in the company. There’s also the issue of the Federal Trade Commission serving as an obstacle to Microsoft’s acquisition. Additionally, some activist investor groups are asking shareholders to vote against the deal in part because of a potential golden parachute for Activision CEO Bobby Kotick, who is expected to leave the company following the takeover. Microsoft.
The fact that Activision Blizzard’s share price is so much lower than Microsoft’s offer could be seen as unusual, since acquiring less than 25% of Microsoft’s offer could in theory net investors free money once the transaction is completed. Even if the sale is approved by shareholders, Microsoft still faces FTC review. Led by Lina Khan, the FTC has taken a more active approach to reviewing deals, which has seen Nvidia’s proposed acquisition of ARM Ltd. and Lockheed Martin Corp.’s offer. to acquire Aerojet Rocketdyne Holdings Inc. canceled.
If Microsoft clears the FTC review, it will also have to get its acquisition approved by the European Union and China.
Wedbush Securities analyst Michael Pachter is more positive about the outcome of Microsoft’s takeover of Activision Blizzard, and explains that even if the FTC launches a lawsuit, it will have difficulty defining the concentrated market problem that the merger could generate. Lawyer Richard Hoeg is skeptical that Wall Street thinks the deal will fall through, call the report “complete, without attenuation, bullshit.”
For more on the deal, see GameSpot’s opinion piece “Bobby Kotick’s payment is a small price for the good that could come from Microsoft’s acquisition” and what’s at stake in the vote. shareholders.