We all take it for granted that Microsoft’s purchase of Activision Blizzard is already done. But the truth is that it still has to go through some regulatory bodies which can cause the operation to fail. It would be rare for them to do so, but by proxy it is possible for it to happen. It is therefore time to wait again before having them all.
Like I said, it seems like there is little reason for an antitrust commission to overturn such a dealbut there seems to be some fear of it happening, at least on Activision’s side.
Activision’s fears over the possibility of not being acquired by Microsoft
In a recent financial report for its shareholders, Robert A. Kotick and Brian Kelly sign a document in which they warn against this fear that the purchase will fail. You can read it in official website Activision if you have any doubts about its veracity.
This document explains two very important things, the first is that if the agreement falls through, the company’s shares will drop significantly and investors may suffer losses. The second consequence is that Activision Blizzard could be forced to pay Microsoft some $2.2 billion.
If the Merger is not consummated, and depending on the circumstances that brought about the completion of the Merger, the market price of Activision Blizzard common stock may decline significantly. If this were to occur, it is not known when, if at all, the price of Activision Blizzard common stock would return to its trading price on the date of this proxy statement.
Accordingly, if the merger is not consummated, there can be no assurance as to the effect of such risks and opportunities on the future value of your Activision Blizzard common stock.
It is also contemplated that depending on the reason for the acquisition denial, Microsoft could also be required to pay Activision Blizzard a reverse fee of between $2 billion and $3 billion. This document looks like an attempt to put pressure on the commission, making it clear that the agreement would generate more losses than gains if it were reversed.
