Microsoft- Activision Blizzard Deal Will Fail
Activision Blizzard Inc. shareholders approved the company’s $69 billion sale to Microsoft Corp on Thursday, but Wall Street is betting that Biden antitrust enforcers could unravel one of the largest mergers in U.S. history.
Microsoft’s $95 offer is a 23% premium over Activision’s current share price, indicating investors see risk the buyout won’t close as planned. This risk premium is more than double that of Twitter Inc. following Elon Musk’s offer, and higher than most of the announced -- but still pending -- deals tracked by Bloomberg.
Tough-talk from President Joe Biden’s antitrust enforcers is fueling investor fears that the deal could be blocked or subject to delays even if it prevails, said Matt Perault of New Street Research. Plus, the deal will also need approval by other governments including the European Union and China.
The merger, which has until June 2023 to close, would make Microsoft the world’s No. 3 gaming company, and would give it ownership over two of the most recognizable gaming brands on the planet in Call of Duty and World of Warcraft. Microsoft would also gain control of Candy Crush developer King, which made $2.58 billion in revenue last year.
More than 98% of Activision shares voted were in favor of the acquisition, the company said. The complete results of the meeting will be reported in a form 8-K to be filed with the U.S. Securities and Exchange Commission by early next week. The shares ticked slightly higher and were trading at $77.09 at 12:48 p.m. in New York.
SOC Investment Group, an activist shareholder group with a small stake, earlier this month encouraged shareholders to vote down the deal. That group and other investors have spoken out against a potential golden parachute for
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