Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)

Do you believe the deal will be approved?

  • Yes, will be approved without changes.

    Votes: 221 24.9%

  • Yes, will be approved but with structural changes to ABK.

    Votes: 102 11.5%

  • Yes, will be approved but only with behavioral concessions.

    Votes: 262 29.6%

  • No, will not be approved.

    Votes: 301 34.0%
  • Total voters
    886
  • Poll closed .
Status
Not open for further replies.
Ronin_7 said:
Unlikely i still think he wants to retire.

Dude is 61, what would he achieve at that age bigger than what he already done?
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Maybe MS offered him a role there when this goes though, he can have some easier job and just work with Phil or something his legacy is already pretty much cemented
 
James Sawyer Ford said:
If I have complete ownership of a company, a 5-10% premium over current market value is not worth it.
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ABK stock price right now is intrinsically tied to this deal though. Every single sale like this ever has the price close in on the deal price right before regulatory approval.

We don't know where the stock goes if it fails, other than the fact it'll certainly go down significantly.
 
93xfan said:
Closing over the CMA should've been their move.
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Please, god, no. I can't eat anymore popcorn.

Music Video Vintage GIF
 
James Sawyer Ford said:
The suitor is the free market. They can go on their brokerage account and sell at a close price to what MS is offering. Their valuation won't go down much if the deal falls through
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LOL, I hope you don't believe that's true. The price would get lower and lower as the market got flooded with shares. In a mass selloff those on the back-end would probably get a noticeably lower price.
 
Activision's lawyers were sat there assisting Microsoft's lawyers (and by extension the CMA).

The most likely scenario is that they've already agreed to a 6 month extension until the end of the year in the background.
 
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James Sawyer Ford said:
Activision has been awfully quiet

I have no clue why they wouldn't just outright reject the deal after the 18th.

EA is currently trading at a higher valuation (48 vs 40 P/E). We are a far cry away from early 2022 when the deal was announced. ATVI is probably trading around fair market value.

In other words, Microsoft is getting a deal by not needing to pay a premium
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Yes but just to play devil's advocate.

What would happen if ATVI pulled out tomorrow night? What would be the ramifications?

1) A majorly pissed off MS. I mean they would throw a fit and probably ATVI would replace Sony at the top of their kill list. MS may be in third place in gaming, but they're still a big presence in other sectors and of course still a significant factor in the gaming market. It would be difficult to work around them and this would make it impossible to work with them.

2) ATVI shareholders - how many of them want this now? What would be the backlash if the board makes the unilateral decision to point at the contract, claim the terms haven't been met and walk. Especially if the share price tumbles in the ensuing chaos and panic.

3) The $3bn. A lot has been made of that. But I'd say, as things stand, it wouldn't be so clear cut that ATVI would get it. The contract refers to non appealable legal decisions being settled. The CMA is clearly still appealable and today's verdict even stretches out that time frame and green lights a new round of negotiations that will probably lead to a settlement. MS would argue that in court, and say ATVI walked and didn't therefore make best reasonable efforts as called for in the contract. They'd probably counter-sue ATVI for breach of terms. As this process has shown, courts don't honor the word or even spirit of laws as well as we may think they should.

4) Backlash and reputational harm from people cheering for this deal to go through. Ok xbox is famously "in third place"tm so that's not a very large group but even so, they are vocal and MS has it's various Astroturfers and media control that would be continually slinging shit at ATVI.

5) To assuage shareholder fears the board would have to say that they can more or less guarantee the shareprice gets above $95 in the near future. If it doesn't, their necks are on the line - and there's a good chance in the short term the share price dips as casual investors panic at the news of the acquisition collapsing.

So offsetting all that pain and risk is the chance of $3bn, and an increase in shareprice without the $95 cap on it.

Thats a lot of risk to take. I think ATVI would have to be very certain of a big price spike in the short term - I said previously at +30%-ish over the $95 this year, may be enough to make them consider taking the damage.

I actually can't believe they'd have the balls to do it no matter the financial incentive - but Bobby is probably the guy who would if anyone would.

The drama would be delicious though - I'd love to watch that play out, not because of gamer meltdowns, just the spectacle of these execs getting shit on them after a massive backstab would be glorious. That's also why it won't happen though - we can't have nice things. 🤷‍♂️
 
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GHG said:
Activision's lawyers were sat there assisting Microsoft's lawyers (and by extension the CMA).

The most likely scenario is that they've already agreed to a 6 month extension until the end of the year in the background.
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That doesn't mean much because that's what the lawyer is supposed to do. He can't be there to actively try and sabotage the deal. Activision has to do everything in their power to help this deal go through otherwise they could end up losing the 3 billion in court if MS decides to sue them if the deal falls through.
 
GHG said:
Activision's lawyers were sat there assisting Microsoft's lawyers (and by extension the CMA).

The most likely scenario is that they've already agreed to a 6 month extension until the end of the year in the background.
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Yeah CMA said last week the talks were w/ ABK + MS not just MS.

There is zero indication of any plan to bail on this deal.
 
IntentionalPun said:
Yeah CMA said last week the talks were w/ ABK + MS not just MS.

There is zero indication of any plan to bail on this deal.
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Well I would say the fact that Bobby outright said he's only doing this deal because of shareholders and the fact that there is no extension deal in place are indications. ABK being at meetings is part of their job so that doesn't' really mean anything. They have to be there to show good faith in trying to get this deal closed.
 
gametimedecision said:
I Defo don't see Microsoft offering that. So you are going on record that you absolutely think activision is gonna walk?
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I simply don't understand why they wouldn't get a massive increase via extension or walk

I have no clue why they would allow an extension for free when they have no contractual obligation to do so (that I'm aware of)
 
James Sawyer Ford said:
Their market value right now is close to what MS offered
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What a crazy coincidence that their current share price ended up at almost but slightly under the offering price.

I would expect Bobby of all people to angle for something extra but I'm not sure anyone wants to risk a guaranteed pay-out versus waiting seconds or days or years or decades or never for Activision to reach the same price again.
 
ToadMan said:
I actually can't believe they'd have the balls to do it no matter the financial incentive - but Bobby is probably the guy who would if anyone would.
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This is a business and money talks.

It's a contract. There should be no hard feelings if the shareholders decide the offer isn't to their liking after the 18th

Their reputation wouldn't be damaged either - again, they have no obligation to stay after the 18th
 
gametimedecision said:
I Defo don't see Microsoft offering that. So you are going on record that you absolutely think activision is gonna walk?
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It's certainly a possibility, it's not just $3B vs $67B, it's $3B + a continued stream of money vs $67B and the buck stops there.

Activision were selling before because the scrutiny (law suits) they were under was tanking the stock price, now that's all blown over and their stock has recovered they are now in a different position.
 
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DaGwaphics said:
LOL, I hope you don't believe that's true. The price would get lower and lower as the market got flooded with shares. In a mass selloff those on the back-end would probably get a noticeably lower price.
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Why would it massively sell off?

Why is Activision worth much less of a valuation than EA?

I would expect a 5-10% discount at most to $95 offered by MS, so a very minescule premium. No company would find those terms desirable to sell
 
IntentionalPun said:
ABK stock price right now is intrinsically tied to this deal though. Every single sale like this ever has the price close in on the deal price right before regulatory approval.

We don't know where the stock goes if it fails, other than the fact it'll certainly go down significantly.
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Look at EA's valuation right now. Considerably higher than activision

It's possible the MS deal is hurting, rather than helping, ATVI share price
 
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James Sawyer Ford said:
Why would it massively sell off?

Why is Activision worth much less of a valuation than EA?

I would expect a 5-10% discount at most to $95 offered by MS, so a very minescule premium. No company would find those terms desirable to sell
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A shit ton of the people that currently own ABK stock are not investors with an interest in the long-term growth potential of ABK. There will be a lot of investment funds and high volume buyers here that purchased for the specific purpose of getting the payout on the sale, those buyers will be the folks that dump first lowering prices. These buyers are the ones that create the specific scenario that @ IntentionalPun IntentionalPun was talking about, because in volume even a sure dollar can add up. The second group of dumpers will be a % of the long-term holders that fear that this might be the best shot they get at it.
 
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DaGwaphics said:
A shit ton of the people that currently own ABK stock are not investors with an interest in the long-term growth potential of ABK.
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And they can go on their brokerage account and liquidate themselves. No need for MS to buy them

The deal was attractive when ATVI traded in the 50s

It's fair market value is much higher than that today
 
James Sawyer Ford said:
Look at EA's valuation right now. Considerably higher than activision

It's possible the MS deal is hurting, rather than helping, ATVI share price
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Huh? How is EA valued higher than Activision? ATVI has like double the market cap.

And EA's price isn't completely divorced from this deal either I iamgine. It's a big deal that it appears MS got this past worldwide regulators and everyone is hoping to be where ATVI is today.
 
IntentionalPun said:
Huh? How is EA valued higher than Activision? ATVI has like double the market cap.

And EA's price isn't completely divorced from this deal either I iamgine. It's a big deal that it appears MS got this past worldwide regulators and everyone is hoping to be where ATVI is today.
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It's the multiples you need to look at. Market cap alone doesn't tell you much.
 
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