Activision Blizzard shareholders overwhelmingly approved Microsoft’s offer to buy the company for $95 per share. Like Bloomberg points out, however, that the vote does not mean the acquisition is a done deal, and the Wall Street crowd is not entirely convinced that it will happen.
If big investors thought that was a sure thing, you’d expect them to buy Activision Blizzard stock at any price below $95, since that’s what Microsoft is going to pay for them, it’s like buying a dollar for less than a dollar. Even if you only get a small discount, you might as well accept the offer. However, Activision Blizzard shares currently cost $77. That’s a big discount, suggesting low confidence that the $95 per share buyback will actually happen.
The agency that could stop the acquisition is the US Federal Trade Commission, which happens to be particularly concerned about this type of merger.
“Evidence suggests that decades of mergers have been a key driver of consolidation across industries, with this latest wave of mergers threatening to further concentrate our markets,” said FTC Chair Lina Khan. said earlier this year. “…Industry consolidation and weakening competition have deprived Americans of an open economy, workers, farmers, small businesses, and consumers paying the price.”
In March, a group of organizations that includes the Communications Workers of America – the union that works to organize Call of Duty QA workers at Raven Software –asked the FTC to scrutinize the case. The group argued that the deal will have anti-competitive effects and that the lack of union membership among Microsoft employees is evidence of union suppression.
In March, Microsoft said it “respects the right of Activision Blizzard employees to choose to be represented by a labor organization” and “will honor those decisions” if the acquisition goes through.
It will take: Last Friday, the US National Labor Relations Board gave Raven Software QA workers the go-ahead to hold a union election after Activision Blizzard denied voluntary recognition. Ballots will be counted on May 23 and a majority vote can establish the first collective bargaining unit at a major US game studio.
There was also some dissent among Activision Blizzard shareholders. The SOC Investment Group, which is dedicated to “organizing workers’ capital into an effective voice for corporate responsibility,” urged shareholders to vote against Microsoft’s acquisition. The group argued that Activision Blizzard was undervalued due to “the board’s incompetent management” of its crisis related to the California lawsuit and allegations of sexual harassment inside, and said that he didn’t believe the deal was viable anyway, given the heightened FTC scrutiny. consolidation.
“Activision shareholders would be better served by replacing the incumbent board with directors who enable the company to realize its true potential, including actively engaging with and empowering Activision Blizzard employees. empowering in their efforts to rebuild corporate culture and restore corporate reputation,” the investment group said.
Nonetheless, 98% of voting shares today approved the acquisition. If it clears the FTC, the roughly $70 billion deal will become Microsoft’s largest-ever acquisition.
“Subject to customary closing conditions and the completion of regulatory review, the proposed transaction is expected to close during Microsoft’s fiscal year ending June 30, 2023,” Activision Blizzard said in a statement. hurry.