Activision’s proposed Blizzard King takeover reaches another important milestone. However, the financial market is betting for the moment on a failure of the transaction.
The announcement of the takeover of Activision-Blizzard by Microsoft at the beginning of the year is already one of the defining events in the history of video games. With a record amount of 68.7 billion dollars, this acquisition covers a very complex file. On the one hand, a tech giant with near-limitless finances that picks up one of the biggest publishers to date after having already acquired Zenimax-Bethesda, and on the other a leading publisher caught up in numerous resource problems. human.
Among the many questions that can be asked about this takeover, the most important to date is the following: will the project succeed?
98% of Activision shareholders vote in favor of takeover
This Thursday, April 28, 2022 was the moment chosen by Activision-Blizzard-King to validate the takeover project by Microsoft for its shareholders. The results are clear to say the least: 98% of shareholders voted in favor of the takeover by Microsoft. The very controversial (to be polite) CEO Bobby Kotick welcomed such a result.
From now on, the two parties are therefore in agreement to move forward on the file, but this is not enough to complete the takeover project. Microsoft must indeed obtain validation from the FTC and other competition authorities, and this will not be easy.
Wall Street is betting on a failed deal
As Bloomberg reports, Activision Blizzard’s stock price is currently some 24% below Microsoft’s asking price. In other words, the stock market is betting on a failure of the transaction in the long term. Indeed, if the takeover is completed, the current shareholders of Activision Blizzard will mechanically resell their shares to Microsoft for 24% above their current prices. This means that those who are reselling at the moment probably think that this 24% more value will not arrive.
Why is Wall Street making such a bet? Shareholders may fear that the takeover will be blocked by competition authorities, particularly in the United States. Under the presidency of Joe Biden, the FTC has indeed regained energy to defend the market, in particular against the growing power of the tech giants. Recently, Nvidia’s plan to buy ARM was abandoned for these reasons.
Another “problem” on fire for Activision-Blizzard, and tomorrow Microsoft, is the creation of a union to defend video game workers within one of Activision-Blizzard’s studios, a first for a game publisher. AAA in the United States.
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