Microsoft is buying Activision Blizzard for $68.7 billion [FTC sues to stop - CMA issues updated preliminary findings]

[Rozalia1]

3 hours ago, boaly2008 said:

That's if the leak is accurate. MS leaked that the CMA was going to approve it, only for the actual decision to be the total opposite.

 

True, but that is a different type of leak. There are two types of leaks that Microsoft does:

 

1: Microsoft is getting its way because Microsoft is always winning and is completely correct in all things. This is leaked out to their stooges to spread around before a decision is made.

2: Microsoft throws a temper tantrum publicly which tells everyone that they obviously didn't get their way. This happens after a decision is made, but before it becomes public. 

 

With the CMA everyone knew the result the moment Microsoft (and Activision) went on TV and started talking about how regulators protect the East who are trying to destroy the West. 

 

As for why lie about things being all good when you have no idea what the result is going to be? Simple, it is Microsoft. They're always winning and strong according to them, except when they're in front of regulators/court, then they're losing and weak... and back to winning and strong once the threat passes. So no complicated reason, they just can't help themselves putting out lies even if those lies serve no actual purpose.

[majob]

This is an old tweet but I thought I'd share it here because he brings up many valid points in regards to Microsoft's  arguments and position in the case

 

 

[MidnightDragon]

Really thought we’d hear about this today. Guess not.

[cy1999aek_maik]

It is not surprising at all to read that there was no financial analysis done about CoD on the switch. Or any analysis at all for that matter. How is something like Modern Warfare II going to run on the switch? Or warzone? Is it going to be a Black Ops 3 on PS3 situation again, where half the modes were missing and the graphics looked like a PS2 game gone wrong? Surely if it was as simple as 'just put it on the switch bro' money hungry Kottick would've already had it on there. Even with his dismissal of Nintendo based on the wii u, he isn't blind, he knows they sold 120m switches and they come out with a CoD every year, none of which have they ever even tried to port there. 

[kidson2004]

2 hours ago, MidnightDragon said:

Really thought we’d hear about this today. Guess not.

Now that the holiday’s out the way, betcha we’ll hear the decision next week. 

[MidnightDragon]

1 hour ago, kidson2004 said:

Now that the holiday’s out the way, betcha we’ll hear the decision next week. 

Then we’ll hear about it for another year.

[majob]

17 hours ago, cy1999aek_maik said:

 

The entire thing was just a strategy for MS to get the green light from regulators. The narrative is to profess you don't want to to restrict access but instead expand it and Sony and those mean regulators are preventing poor microsoft from delivering COD to more people despite the fact Activision was more than capable at any given point and time of doing so themselves

Edited July 8, 2023 by majob

[cy1999aek_maik]

1 hour ago, majob said:

The entire thing was just a strategy for MS to get the green light from regulators. The narrative is to profess you don't want to to restrict access but instead expand it and Sony and those mean regulators are preventing poor microsoft from delivering COD to more people despite the fact Activision was more than capable at any given point and time of doing so themselves

Yes but the facade will be unmasked sooner or later. Either they won't port it on the switch/switch 2, or they will and it will be a much inferior version. Either way I think it'll make the regulators take a second look at the deal they're passing eventually 

[SelectiveGamer]

This is probably going to be the last time I post in here before the decision is given and I may not post anymore afterwards (unless I feel like it of course depending on what the decision is I guess)

 

But I just feel like... and again could be paranoia and/or conspiracy hat me again talking... the longer this decision takes... the more likely it is the judge just let's Microsoft get what they want and then they go through with their strategy to 'spend Sony out of business' (and yes this is their real strategy I don't give a f what they claim)

[jgm4789]

Im thinking there most likely there will be a cloud version of cod on switch similar to how other more graphically intense games like resident evil 7 or assassins creed Odyssey are handled. Either that or port cod mobile.

[Rozalia1]

On 08/07/2023 at 1:19 AM, cy1999aek_maik said:

It is not surprising at all to read that there was no financial analysis done about CoD on the switch. Or any analysis at all for that matter. How is something like Modern Warfare II going to run on the switch? Or warzone? Is it going to be a Black Ops 3 on PS3 situation again, where half the modes were missing and the graphics looked like a PS2 game gone wrong? Surely if it was as simple as 'just put it on the switch bro' money hungry Kottick would've already had it on there. Even with his dismissal of Nintendo based on the wii u, he isn't blind, he knows they sold 120m switches and they come out with a CoD every year, none of which have they ever even tried to port there. 

 

No financial analysis was done because as we know, Microsoft is lying. If they get CoD they aren't putting it on the Switch natively. No CoD on Switch really is a bit odd though. It not being strong enough and Kotick's mention of underestimating the Switch are valid reasons, but the moment it became clear that the Switch was doing incredibly well why didn't Activision commission a version of CoD for Switch? Considering the things we've seen spelled out that Activision basically extorted Xbox into giving them a better rate, as not giving it would have meant no Series X|S version of CoD... I wonder if Activision tried such a trick with Nintendo, who laughed in his face and told him to do their worst.

 

On 08/07/2023 at 10:44 PM, SelectiveGamer said:

This is probably going to be the last time I post in here before the decision is given and I may not post anymore afterwards (unless I feel like it of course depending on what the decision is I guess)

 

But I just feel like... and again could be paranoia and/or conspiracy hat me again talking... the longer this decision takes... the more likely it is the judge just let's Microsoft get what they want and then they go through with their strategy to 'spend Sony out of business' (and yes this is their real strategy I don't give a f what they claim)

 

Do not worry. This deal is already dead with the CMA block. All Microsoft has done with this FTC case is have many of their lies and motives confirmed (many of us have known all along). Which is funny because the moment Sony got involved the Microsoft army was boasting about how Microsoft was going to hit them with heavy discovery and reveal all of Sony's dirty little secrets... and that hasn't happened and instead Microsoft's dirty little secrets have been spotlighted instead.

 

Why do all this if the deal is already dead? Surely the big time executives at Microsoft are all very smart and have some master plan they're ready to spring? Unlikely. The reality is Microsoft is trashing out in confusion hurting itself at the moment as those in charge are having difficulty understanding regulators actually standing up to them and preventing them from buying their way to success as they've always done.

 

On 08/07/2023 at 11:14 PM, jgm4789 said:

Im thinking there most likely there will be a cloud version of cod on switch similar to how other more graphically intense games like resident evil 7 or assassins creed Odyssey are handled. Either that or port cod mobile.

 

Microsoft has it in writing they intend to do a native version on the Switch. Of course if the deal goes through they'll no doubt claim that they always meant a Cloud version and people read too much into the word native. Alternatively they listed the Switch yes, but only because the next Nintendo console isn't announced, so when they said Switch they really meant that one. 

[technole]

20 hours ago, Rozalia1 said:

 

No financial analysis was done because as we know, Microsoft is lying. If they get CoD they aren't putting it on the Switch natively. No CoD on Switch really is a bit odd though. It not being strong enough and Kotick's mention of underestimating the Switch are valid reasons, but the moment it became clear that the Switch was doing incredibly well why didn't Activision commission a version of CoD for Switch? Considering the things we've seen spelled out that Activision basically extorted Xbox into giving them a better rate, as not giving it would have meant no Series X|S version of CoD... I wonder if Activision tried such a trick with Nintendo, who laughed in his face and told him to do their worst.

 

 

Do not worry. This deal is already dead with the CMA block. All Microsoft has done with this FTC case is have many of their lies and motives confirmed (many of us have known all along). Which is funny because the moment Sony got involved the Microsoft army was boasting about how Microsoft was going to hit them with heavy discovery and reveal all of Sony's dirty little secrets... and that hasn't happened and instead Microsoft's dirty little secrets have been spotlighted instead.

 

Why do all this if the deal is already dead? Surely the big time executives at Microsoft are all very smart and have some master plan they're ready to spring? Unlikely. The reality is Microsoft is trashing out in confusion hurting itself at the moment as those in charge are having difficulty understanding regulators actually standing up to them and preventing them from buying their way to success as they've always done.

 

 

Microsoft has it in writing they intend to do a native version on the Switch. Of course if the deal goes through they'll no doubt claim that they always meant a Cloud version and people read too much into the word native. Alternatively they listed the Switch yes, but only because the next Nintendo console isn't announced, so when they said Switch they really meant that one. 

 

Aside from the Microsoft $3b termination fee or Activision paying $2.2b if they pull. It's in the best interests of both board of directors to get the deal done and the worst case is it completely falling apart because in the contract, as Microsoft is on the hook for the breakup fee if it's due to regulatory and certainly Satya doesn't want to report such a write-off. Especially after hosing Microsoft employees with no raises this year.

 

Buyouts miss deadlines sometimes for a variety of reasons. With the next court date of 8/3 and projected closing date of 7/18, they could amend the buyout agreement with a new closing date due to regulatory approvals, and likely without any additional penalties on either side.

Edited July 10, 2023 by technole

[AJ_-_808]

6 minutes ago, technole said:

It's in the best interests of both board of directors to get the deal done

Is it though?  Unless the board is going to retire after selling the company, it may not be in their best interest at this point to sell to MS who is likely going to destroy their company (look at Bethesda's recent comments, or MS' other acquisitions).  They may be happy with a free 3bn to resume business as usual 

[technole]

1 minute ago, AJ_-_808 said:

Is it though?  Unless the board is going to retire after selling the company, it may not be in their best interest at this point to sell to MS who is likely going to destroy their company (look at Bethesda's recent comments, or MS' other acquisitions).  They may be happy with a free 3bn to resume business as usual 

 

Yes, buyout is $95/share, Activision closed at $82.80 today.

[AJ_-_808]

Just now, technole said:

 

Yes, buyout is $95/share, Activision closed at $82.80 today.

 And if it drops to rock bottom if MS acquires and tanks their sales a year or whenever from now? Look further ahead than what the stock closed at today.

[Guardian_owl]

Except it isn't really best in their both interests to get the existing deal done. Arguably with the CMA Sword of Damocles hanging over the deal, it is in Activision's interest to feign the good soldier having Microsoft's back, while letting the clock run out on the deal and then blaming the regulators so they can collect the fee. Then Activision can either end the deal with Microsoft in a better position than when they started and are $3 billion richer, or they can goad Microsoft into trying to reach for the grapes again and then they can renegotiating a slightly more favorable deal (the stock was selling in the mid-60s when the original deal was announced) with a higher failure fee if it isn't closed by a certain new date / killed by regulators. Activision will have a lot of leverage ($3 billion big ones) if they decide to renegotiate the deal when the clock runs out on the original deal. Then if via some dark pact with a otherworldly cosmic entity Microsoft is able to clear the CMA away, Activision will have gotten a better deal for their shareholders, or if the block remains (as it probably will) then they will have fleeced Microsoft for an even larger failure fee.

Edited July 11, 2023 by Guardian_owl

[technole]

1 minute ago, AJ_-_808 said:

 And if it drops to rock bottom if MS acquires and tanks their sales a year or whenever from now? Look further ahead than what the stock closed at today.

 

As a shareholder, you get paid the contracted $95 per share, cash in a buyout. ATVI becomes delisted from Nasdaq, it will cease to exist. You don't get new MSFT shares.

 

Employees retained will vest stock options immediately upon closing, and any outstanding will get converted MSFT stock awards in-exchange, and considering that stock is doing very well this is also a perk to continue employment.

[Iker_01]

2 hours ago, technole said:

 

Yes, buyout is $95/share, Activision closed at $82.80 today.

Keep in mind, they were buying the shares at a premium. The difference is not that big right now. Back then, their PR wasn’t in the best place (sadly, it’s recovered), the stock price was a lot lower, and CoD Vanguard wasn’t exactly successful (both CoD MW II and Diablo IV were massive commercial hits).

[AJ_-_808]

2 hours ago, technole said:

 

As a shareholder, you get paid the contracted $95 per share, cash in a buyout. ATVI becomes delisted from Nasdaq, it will cease to exist. You don't get new MSFT shares.

 

I see.. I still think there would be potential negatives for the board at some point if sales rank due to potential exclusivity/game pass cannibalism.

 

No doubt some workers will get axed afterward, but doubt the board cares too much about that

[technole]

6 hours ago, Iker_01 said:

Keep in mind, they were buying the shares at a premium. The difference is not that big right now. Back then, their PR wasn’t in the best place (sadly, it’s recovered), the stock price was a lot lower, and CoD Vanguard wasn’t exactly successful (both CoD MW II and Diablo IV were massive commercial hits).

 

Price was $82.31 on the day it was announced in January 2022, so it's practically back to the same price at offer filing. The 52-week low was $71 in February, stock had been outpacing the market on regaining. Analyst confidence of the buyout before the trial with the additional concessions certainly helped.  

 

6 hours ago, AJ_-_808 said:

 

I see.. I still think there would be potential negatives for the board at some point if sales rank due to potential exclusivity/game pass cannibalism.

 

No doubt some workers will get axed afterward, but doubt the board cares too much about that

 

ATVI board dissolves at closing, Bobby Kotick is likely not being retained, if they were they would have likely mentioned intent in an SEC filing, which could still come or they can just simply pay the golden parachute and re-hire as a consultant to help the integration. 

 

Activision business will report up to Microsoft Gaming CEO, Phil Spencer, whom reports to Satya Nadella, not only Microsoft CEO, but also Chairman of the Board as they gave him the title two years ago. Which is also why Microsoft has been more aggressive these past few years. There won't be repercussions whether they win or not, they'll just move on to the next plan as was seen in the FTC exhibits. Aside from no employee raises and cutting 10k workers earlier this year, Satya still has the balls to call it a landmark year. If that says anything.

[Iker_01]

1 hour ago, technole said:

 

Price was $82.31 on the day it was announced in January 2022, so it's practically back to the same price at offer filing. The 52-week low was $71 in February, stock had been outpacing the market on regaining. Analyst confidence of the buyout before the trial with the additional concessions certainly helped. 

 

The shares jumped a lot in value once the acquisition was announced. Most likely they considered a stock value below $70 since the stock value was below that number from November 2021 right until the announcement of the acquisition.

 

Jan 18, 2022				82.31
Jan 14, 2022				65.39
Jan 13, 2022				64.17
Jan 12, 2022				64.81
Jan 11, 2022				65.85
Jan 10, 2022				63.11
Jan 07, 2022				64.04
Jan 06, 2022				63.82
Jan 05, 2022				66.29
Jan 04, 2022				67.20
Jan 03, 2022				67.42

Edited July 11, 2023 by Iker_01

[Oberlin1694]

Seems to be taking forever to find out the decision on this. The fact it’s taking so long could be either good or bad. Or maybe bad with a little good.

 

I won’t even lie, I’m not majorly phased if Microsoft is allowed to acquire Activision, but my personal belief is it needs to come with the stipulation that if they close on this studio, and buyout this studio, they will not be allowed to make any further buyouts for a minimum of a 10-year period in order to ensure competition remains within the gaming industry and to stop them creating the monopoly they’re so desperate to have.

 

If they’re allowed Activision and then allowed to just buy even more studios then it’s fucking stupid and action needs to be taken, quick to stop Microsoft before they try and destroy the gaming landscape completely.

[Rozalia1]

It's true, once the shareholders cash out it doesn't matter if Microsoft closes Activision the next day. They got their money and that is all that matters. If the system was different and shareholders got paid over say a 5 year period based off how the sold company was doing, then we'd not even be talking about this as the shareholders would have rejected Microsoft's offer due to the obvious reason that your gaming business gets wrecked the moment you put it under Microsoft.

 

On the matter of Activision's value, it has been larger than the rate Microsoft is buying it for. February of 2021 for example their share price was at 103. In fact, confidence is apparently high that Activision will be able to, in time, get above the current rate that Microsoft is buying them at. That would be a reason why shareholders would rather not try and continue this, as they can just keep the shares and wait for it to go above the amount Microsoft is buying at.

 

In terms of the deal, the FTC part specifically, the date Microsoft wanted a decision made for has passed. Once the decision is made it takes effect the next day and there is also a 5 day period afterwards where Microsoft cannot close the deal. Today is the 11th, tomorrow would be the 12th, and 5 days going forward from that would be the 17th. Now the date for the deal is the 18th... but it seems to be a case of the cut off being at the start of the 18th, not the end of the 18th. I have seen it said by Microsoft supporters that the judge can decide to reduce the 5 day period if she wants which... not so sure it works like that. She is already doing a remarkably fast decision for the benefit of Microsoft and then on top of that she is going to reduce the 5 day period too? We'll have to see.

[technole]

5 hours ago, Iker_01 said:

 

The shares jumped a lot in value once the acquisition was announced. Most likely they considered a stock value below $70 since the stock value was below that number from November 2021 right until the announcement of the acquisition.

 

Jan 18, 2022				82.31
Jan 14, 2022				65.39
Jan 13, 2022				64.17
Jan 12, 2022				64.81
Jan 11, 2022				65.85
Jan 10, 2022				63.11
Jan 07, 2022				64.04
Jan 06, 2022				63.82
Jan 05, 2022				66.29
Jan 04, 2022				67.20
Jan 03, 2022				67.42

 

Buyout discussions from Microsoft was initially targeting $80 but Activision balked.  Both came to an agreement on $95 on December 15th 2021, when they executed the exclusivity agreement the stock was hovering $61 during the negotiation period. Now there is always the natural stock increase when the rumors comes out that an agreement is coming, and the argument the board can make is they would have never realized this increased stock value without a transaction. There was also four other companies that wanted to discuss a transaction with Bobby Kotick during this window. 

 

From the 14A some tidbits on how they ended up at $95, along with getting the reverse termination fee from Microsoft.

 

Quote

 

"On November 28, 2021, based on discussions with Messrs. Kelly, Corti and Morgado, Mr. Kotick communicated to Mr. Spencer that the Activision Blizzard Board of Directors might be willing to entertain a proposal, and potentially to engage in discussions relating to a potential strategic combination, if Microsoft was prepared to propose a transaction in a range of $90.00-$105.00 per Activision Blizzard share, rather than the $80.00 per share valuation that Mr. Spencer had indicated. Following that discussion, on November 29, 2021, Mr. Spencer communicated to Messrs. Kotick and Kelly that Microsoft was willing to negotiate a potential transaction within the $90.00-$105.00 per share range, albeit noting that Microsoft would be more comfortable at the lower end of the range.

 

December 15, 2021: The Activision Blizzard Board of Directors discussed a range of potential alternative responses in connection with the non-binding indication of interest received from Microsoft and the relative advantages and disadvantages of a combination with Microsoft compared to other potential counterparties, as well as continuing on a standalone basis, and also considered additional factors, including, among other things, the economic and competitive landscape of the current gaming and technology sectors. After discussions, the Activision Blizzard Board of Directors directed Messrs. Kotick and Kelly and representatives of Allen & Company to convey to Microsoft a request to increase its proposed purchase price from $90.00 per share to $100.00 per share. At the same time, the Activision Blizzard Board of Directors authorized management to proceed with its negotiations with Microsoft, without the need for further Board authorization, in the event management was able to increase Microsoft’s proposal to at least $95.00 per share.

 

Messrs. Kotick and Nadella had a series of telephone calls over the course of December 16, 2021. Mr. Nadella initially communicated Microsoft’s willingness to increase the price contemplated by Microsoft’s non-binding indication of interest from $90.00 to $93.00 per share on the condition that Activision Blizzard grant Microsoft a 30-day exclusivity period. Mr. Kotick informed Mr. Nadella that he was not authorized to proceed at a price below $95.00 per share, but he was authorized to consider a $95.00 per share price with a 30-day exclusivity commitment at that price level and also would need an agreement from Microsoft on certain other key terms, particularly related to a reverse termination fee. Mr. Nadella responded that he would have to discuss further internally. Subsequently, Mr. Nadella proposed to increase the price provided for in Microsoft’s non-binding indication of interest to $95.00 per share and expressed willingness to engage in discussions on whether Microsoft would agree to a reverse termination fee and the quantum of such fee, as well as other transaction terms, at the appropriate time." 

 

 

 

[technole]

 Judge Corley has ruled this morning to deny the FTC’s preliminary injunction request.

 

Quote

Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision’s content to several cloud gaming services. This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.