PaintTinJr
Member
Well there goes our afternoon entertainment on Gaf of a thread going live (with gold) for the live news feed streamed as Interpol come for you.
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Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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Heisenberg007
Gold Journalism
Ar¢tos
Member
And before they didn't have marketing deals close to expiring, if they renew now they risk their current deal expiring and not being able to make a new one until the FTC court case ends (should end after the CAT/CMA appeal). That will also make the price of a new deal go higher.
Sony
Nintendo
It's gonna be an interesting negotiation, because part of the increase in price is due to the merger speculation. ATVI stock went down after CMA announced the block. The increase in price seems to be correlated with pro-merger news. In a sense, Microsoft will be paying a premium due to its own doing and they will use that in negotiating a new deal.
Does anyone know now that the console SLC argument is dropped my CMA, if there still be a parity contract between MS and Sony?
POKEYCLYDE
Member
They couldn't get anyone to top Microsoft's $68.7B, I doubt they could get anyone to top $75B.
As for a 30% premium:
30% is the standard. The 45% Microsoft is currently ready to pay all has to do with the situation Activision was in when the acquisition was announced.
feynoob
Banned
This is what people are ignoring.They couldn't get anyone to top Microsoft's $68.7B, I doubt they could get anyone to top $75B.
As for a 30% premium:
30% is the standard. The 45% Microsoft is currently ready to pay all has to do with the situation Activision was in when the acquisition was announced.
Activision won't get 95$ per share from other people. They are not crazy to demand a high share. If they do that, MS will simply pull out and Activision will lose a lot of money in the process, due to them not being able to get this offer.
If Comcast is the one who will buy them, they will buy them for less than 95$ per share.
MasterCornholio
Member
That is true but it all depends if Microsoft can even buy Activision. If they can't then Activision can be bought by someone else and they might have to go with a lower price.
KungFucius
King Snowflake
Having just been through a nearly 2 year process for acquisition, do you really think ABK will be looking for another buyer? Would you, as a shareholder want to wait another 2+ years for a payout or failure?
Also 3 billion is not going to appease shareholders. That is not even 5% of the total deal. Do people think that the board, who will make a ton on the deal, will prefer 3 billion now over the chance of 30% in a few months or 3 billion if that falls through in a few months?
ChuckeRearmed
Member
Not to mention Comcast are likely to offer a merger and stocks rather than a pure cash deal like Microsoft. I wonder why people ignore the fact that the current ATVI stock price has merger approvals in mind - it dropped almost to 70 when CMA blocked. 95$ per share is a close as it can get to ABK's (and many other companies) peak during COVID.
Also people can disregard FTC until it files an injunction - MS could close the deal on 22th if not for CMA. And FTC are highly unlikely to get this injunction at all - as with the approvals from other regulators who discarded FTC's own arguments, a judge won't suddenly accept FTC's reasoning to block the deal. Gamer's lawsuit also contained some FTC's arguments and we know what happened there.
By and large, unless CMA find a way to prove that cloud market is a separate market and that foreclosure there is somehow more probable than in a console market (where they failed to prove that), CAT will probably just discard CMA's reasoning that cloud is a separate market at all and it will ask CMA to use another SLC...which they don't have anymore. It is pretty much clear at this point that CMA and FTC are playing "regulatory game" and were betting on EC blocking the deal. Otherwise CMA would not be in a such miserable position.
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Astray
Gold Member
They will at least demand a higher break-up fee, the existing deal had a break-up fee that gradually increased until it reached the current 3 billion.
They will also probably demand a similar premium to what they got from MS back in 2022 (ABK share price was ~$65, and MS lodged a $95/share offer, this is a +%46 premium).
Blindly applying the same premium to current share price (~$78, which analysts are still recommending to buy at as of now) means that to maintain the exact same spread for its shareholders, ABK needs to demand ~$114/share from Microsoft, even the halfway point between past and old estimation (95+114 divided by 2 = $104) is about 6 billion extra (merger price would go to ~$75bn).
These numbers are likely unworkable for a deal that already isn't very favorably looked at by Microsoft shareholders (this is the 40th reminder to everyone here that the CMA block actually sent MSFT stock UP lmao).
Yep.
I personally don't think Activision gets sold immediately to someone else if this deal fails, they are on much healthier ground and never had any profitability issues either. This deal was about providing a golden parachute to Kotick when he needed it the most. Does he and other big shareholders still feel they need one? Jury's out tbh as we don't really know.
I don't think they will be looking for another buyer, but they will surely have to convince their shareholders to agree to whatever new merger agreement happens now.
Also 3 billion CAN appease the majority shareholders if the ABK board uses it for share buybacks to raise the share price. I guarantee you that there will be pressure on Kotick to do so if the deal fails for any reason.
POKEYCLYDE
Member
Depends on where ABK's stock price ends up after this deal falls through. If it drops back down to $65, I doubt they'd get the $95/45% premium. However, if it stays at 80 or drops to 75, any interested buyer would probably pay a 30% premium, which would be over $95/share.
Some things to keep in mind about a possible renegotiation:
If Activision lets this deal die to collect their $3B, Microsoft cannot even attempt to acquire ABK for 10 years. (Not many possible buyers for ABK, and one would be off the table for 10 years)
There is uncertainty around where ABK's stock is, if the deal officially dies how much does ABK's stock price drop? Does the $3B break up fee mitigate that potential drop?
I'm not sure how a renegotiation would work, what ABK's fiduciary duty is in that scenario, would ABK have to bring any offer made by Microsoft to the shareholders? If a new offer of $105/share was brought before shareholders, who wouldn't agree to that? It's roughly 10% higher than what those shareholders originally agreed to. Even if you believe the deal to be doomed, agreeing to a new higher deal price would likely up your share price in the meantime rather than the deal officially dying and possibly dropping your share price.
How much does being in "business limbo" cost ABK? How much would they realistically get from a renewed marketing deal with Sony? The marketing agreement ends at some point in 2024, the appeal process /deal could be done or dead by the time the marketing agreement is over. And if the process lasts into 2025, I'm sure Activision would take it into account what a 1 year of no marketing agreement would cost them and tie that into a new break up fee.
If ABK believes this acquisition doesn't have a shot, why wouldn't they ride out the process for another year or 2 for a guaranteed $6B (assumption). Is the $3B that enticing that the "delayed gratification" of a higher break up fee isn't even thought about?
There isn't much of a downside for ABK to renegotiate. I'm thinking if anything, Microsoft might be more weary of being in "business limbo" for the next year or 2.
Those are some of my recent thoughts on the possible renegotiation. Just a lot of uncertainty really.
PaintTinJr
Member
I'm not sure if anyone else got the same impression from the CMC, yesterday, but there was a part quite early on where Beard was pushing the importance of their new expert to give analysis on some US legal document he claimed the CMA had ignored, and the importance of not ignoring another country's laws.
The conversation about timescales moved onto him claiming the UK was a tiny part of the gaming market blocking the transaction- which in the deal context is complete rubbish, which he personally seemed ignorant to - when the rest of the world was approving the deal, yet when the FTC was discussed, who the CMA stated they understood the FTC current position was to block the deal, and Beard leaned towards the lack of injunction to dispute that, he seemed to get caught out by the CMA stating that US was the home territory of the two companies, which seemed to hit its mark with the judge, along with a quizzical statement that Microsoft couldn't close the deal in the US, anyway because the FTC had a right/authority to scrutinise the deal and were currently doing that beyond the time line he was arguing over.
The lack of response to contradict the CMA, that Microsoft could close the deal without the FTC finishing its scrutiny, made for a lovely contrast with his prior point that the CMA were ignoring a Microsoft shill to explain US contract law to them in their analysis, and looked like bait from the CMA to get the judge's focus on just how much contempt Microsoft really have for the FTC, and would have had that contempt on record, had Microsoft contradicted the CMA assertion.
If the CMA appeal is on going and Microsoft show procedural contempt to the FTC actions in the US I can see that exchange coming back to bite Microsoft in the UK appeal, for them failing to disclose their true intentions to ignore the FTC authority wherever possible.
The conversation about timescales moved onto him claiming the UK was a tiny part of the gaming market blocking the transaction- which in the deal context is complete rubbish, which he personally seemed ignorant to - when the rest of the world was approving the deal, yet when the FTC was discussed, who the CMA stated they understood the FTC current position was to block the deal, and Beard leaned towards the lack of injunction to dispute that, he seemed to get caught out by the CMA stating that US was the home territory of the two companies, which seemed to hit its mark with the judge, along with a quizzical statement that Microsoft couldn't close the deal in the US, anyway because the FTC had a right/authority to scrutinise the deal and were currently doing that beyond the time line he was arguing over.
The lack of response to contradict the CMA, that Microsoft could close the deal without the FTC finishing its scrutiny, made for a lovely contrast with his prior point that the CMA were ignoring a Microsoft shill to explain US contract law to them in their analysis, and looked like bait from the CMA to get the judge's focus on just how much contempt Microsoft really have for the FTC, and would have had that contempt on record, had Microsoft contradicted the CMA assertion.
If the CMA appeal is on going and Microsoft show procedural contempt to the FTC actions in the US I can see that exchange coming back to bite Microsoft in the UK appeal, for them failing to disclose their true intentions to ignore the FTC authority wherever possible.
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PaintTinJr
Member
I'm guessing you didn't watch the CMC, yesterday, because the judge used the phrase "the CMA wins" in reference to any disputes between experts where it is not an "incontrovertible error" (Williams used repeatedly), and the judge hasn't even considered the admissibility of Microsoft's additional info, and has already stated "the tribunal aren't naive" to Microsoft backfilling data and is "aware the data has a purpose".
As it stands Microsoft are miles away from piercing the CMA with an important argument to change the outcome.
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PharaoTutAnchAmun
Member
Yeah there is only a W ore an L. Maybee, perhaps, but, ore compromising is not excepted in consolewars
Bernoulli
M2 slut
Yes i noticed that
Beard kept saying that the FTC didn't block because they didn't file an injuction or something
And after he said Microsoft would never close the deal without teh FTC approval
But then he said that the CMA was the only one blocking the deal from closing and they would have already closed if the CMA approved
But he was pissed about the 17th date he kept repeating that so many times thatvit would jeopardize the deal if it's any further
jm89
Member
Bernoulli
M2 slut
I was relieved when he said that
He said of course we know Microsoft will bring "experts" that side with them we are not naive
It was strange how much Beard kept saying they need this experts because they will change everything
If only we could get "that" expert
Dick Jones
Gold Member
Sage baby!!!I was relieved when he said that
He said of course we know Microsoft will bring "experts" that side with them we are not naive
It was strange how much Beard kept saying they need this experts because they will change everything
If only we could get "that" expert
Mr Moose
Member
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PropellerEar
Member
I wonder why people ignore the current position of ATVI.
Success after success, outpacing every big multi platform publisher in the business.
The deal puts an effective cap on the valuation and keeps ATVI stock valuation very uncertain.
Any news that can affect the valuation at the moment is CMA & FTC news and not actual financial results.
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Bernoulli
M2 slut
Going back to this, did Microsoft use eu's findings about market share to do this graphic or europe used Microsoft's graphic as proof?A speech spotted by Eurogamer from European Commission executive vice president Margrethe Vestager indicates that Sony's console is currently significantly outperforming Microsoft's in the region.
Vestager was discussing why the European Commission approved the Activision Blizzard deal, noting that both companies' presence in Europe wasn't high enough to warrant concern.
"The overall market share for Microsoft and Activision was generally low in Europe," she said. "It's only when you look at specific segments like shooter games that you get to above 20%.
"And for consoles, Sony sells about four times more PlayStations than Microsoft sells Xboxes. With this context, we did not think the merger raised a vertical issue."
European Commission Says PlayStation Sells 4 Times More Consoles Than Xbox in Europe - IGN
The European Commission, who earlier this month approved Microsoft's acquisition of Activision Blizzard, has said PlayStation sells four times more consoles than Xbox in Europe.www.ign.com
Did eu just believe everything they said?
ChuckeRearmed
Member
Except it does not. Nothing prevents ATVI stock from growing if shareholders believe that ABK is worth more than their current market cap.
Banjo64
cumsessed
PaintTinJr
I’ve really enjoyed reading your observations about yesterday. Good observations re Microsoft failing to disguise their contempt for the FTC.
GHG
Member
While this deal is ongoing? Yes it does put a cap on the stock.
Go look at the options activity and pricing above $95.
Why would someone buy above $95 when it's penned in that the maximum you will get is $95 if the deal goes through? If you buy above $95 you will lose money the monent the deal is concluded.
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icerock
Member
So much chatter over scheduling for a hearing? I swear 99% of folks deeply invested into this in online folklore haven't witnessed any legal proceedings with the way they're going about it.
Coming to the actual case, I don't know why so many folks are stressing about ABK-MS now having to re-negotiate the original terms on back of yesterday. That was going to happen regardless, because FTC trial doesn't begin until August, and post CMA block, even if MS were granted their wish, with trial, verdict, and possible CMA re-assessment it'd still be unlikely it's all done within 2023. So, they were always going to sit on the table again to re-negotiate.
My only takeaway from yesterday is, which no one is talking about is, Microsoft wanted entirety of hearing to be surmised and done with prior to date of closing i.e. 18th July and stressed multiple times over why this is important or it could jeopardize this deal. Thing is, even if Microsoft got their wish, the verdict still wouldn't be announced then and there, so why is the date important? It is quite simple, if hearing were held within the time frame and it were favorable. It'd strengthen their position when they try to re-neg with ABK again. Now, with this being just outside the time frame. If ABK are feeling shakey, they can't really point out that whatever took place during the hearing increases their confidence with regards to this passing through. It reduces their bargaining power when they sit back on the table. I'm very curious as to what the re-neg terms look like, ABK at worse stand to gain $3B if they stand firm. Or, they could extend the time-frame for more money which understandably Microsoft doesn't want to pay, or have it be reduced as much as possible. Hence, all the shenanigans yesterday for having it done by July 17th.
Coming to the actual case, I don't know why so many folks are stressing about ABK-MS now having to re-negotiate the original terms on back of yesterday. That was going to happen regardless, because FTC trial doesn't begin until August, and post CMA block, even if MS were granted their wish, with trial, verdict, and possible CMA re-assessment it'd still be unlikely it's all done within 2023. So, they were always going to sit on the table again to re-negotiate.
My only takeaway from yesterday is, which no one is talking about is, Microsoft wanted entirety of hearing to be surmised and done with prior to date of closing i.e. 18th July and stressed multiple times over why this is important or it could jeopardize this deal. Thing is, even if Microsoft got their wish, the verdict still wouldn't be announced then and there, so why is the date important? It is quite simple, if hearing were held within the time frame and it were favorable. It'd strengthen their position when they try to re-neg with ABK again. Now, with this being just outside the time frame. If ABK are feeling shakey, they can't really point out that whatever took place during the hearing increases their confidence with regards to this passing through. It reduces their bargaining power when they sit back on the table. I'm very curious as to what the re-neg terms look like, ABK at worse stand to gain $3B if they stand firm. Or, they could extend the time-frame for more money which understandably Microsoft doesn't want to pay, or have it be reduced as much as possible. Hence, all the shenanigans yesterday for having it done by July 17th.
adamsapple
Or is it just one of Phil's balls in my throat?
The statements from the Activision lawyer yesterday detailing how the CMA only spent a small portion of their investigation into cloud before making their decision.
www.tweaktown.com
CMA allegedly only spent 4 weeks out of its 32-week investigation on cloud
Activision legal counsel alleges that regulators at the Competition and Markets Authority (CMA) had only spent 1/8th of its total investigation on cloud.
www.tweaktown.com
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Tomeru
Member
They explained it over 400 pages no? Imagine if tgey took even more time.
azertydu91
Hard to Kill
Already been debunked in this thread but keep trying.The statements from the Activision lawyer yesterday detailing how the CMA only spent a small portion of their investigation into cloud before making their decision.
CMA allegedly only spent 4 weeks out of its 32-week investigation on cloud
Activision legal counsel alleges that regulators at the Competition and Markets Authority (CMA) had only spent 1/8th of its total investigation on cloud.
adamsapple
Or is it just one of Phil's balls in my throat?
Where and how has it been debunked what the lawyer said just yesterday?
You didn't even read that did you ?
azertydu91
Hard to Kill
Look at post 53 182 it debunks pretty much everything that was said, another lie on top doesn't need more debunking does it ?Where and how has it been debunked what the lawyer said just yesterday?
You didn't even read that did you ?
Edit: after clarification it was post 53 186.
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Their proposed schedule was that the hearing was supposed to start the week commencing the 17th. So don't know that equals "done by the 18th" but ehh.
They probably did want it but they didn't propose that.
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adamsapple
Or is it just one of Phil's balls in my throat?
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Varteras
Gold Member
They didn't seem to be happy with the decision for the starting date to be almost a week after the deadline and between 2 to 3 weeks after for a decision to be reached. One that could very well not favor them anyways.
azertydu91
Hard to Kill
Ooops my bad it was the 53 186th post explaining that their concern about cloud was from phase one so way earlier than at 28th week.Unless you have an explanation on why cloud was problematic to the CMA even before they "allegedly" started working on it.
"debunked"
They probably weren't happy, I don't think CMA are also happy.
azertydu91
Hard to Kill
MasterCornholio
Member
I always thought cloud was a concern for the CMA. They had two major concerns but they dropped one of them during the investigation. It doesn't mean they still didn't have an issue with the merger hence the block.
Topher
Gold Member
The statements from the Activision lawyer yesterday detailing how the CMA only spent a small portion of their investigation into cloud before making their decision.
CMA allegedly only spent 4 weeks out of its 32-week investigation on cloud
Activision legal counsel alleges that regulators at the Competition and Markets Authority (CMA) had only spent 1/8th of its total investigation on cloud.
They debunked it themselves.
"The back-end of the 32 weeks dealt with the cloud story."
Really? Then why was the "cloud story" referenced in Phase 1 of CMA's investigation back in September?
DeepEnigma
Gold Member
Not sure they would want to be locked out of third party marketing deals for future unannounced games should this go on for a couple of years (FTC dragging ass, etc.)
A lot of reliance factors to weigh on.
azertydu91
Hard to Kill
Don't worry he'll give you a lol emoji then bolster out of the thread until we all forget his bullshit.
DeepEnigma
Gold Member
"But the lawyer said." Lawyers say a lot of bullshit, it's their job.Where and how has it been debunked what the lawyer said just yesterday?
You didn't even read that did you ?
It has been proven false by the Phase 1 report. Which you were here for, and having some convenient narrative/scripted amnesia.
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feynoob
Banned
They can do that with MS and demand more money from them.
DeepEnigma
Gold Member
That is another option as well. But we shall see, since MS is reluctant to pay more for said deals in general.
jm89
Member
What's worse with that tweak town article about the CMA only working on cloud for 4 weeks, is the guy who posted this derek has been following this deal for ages. He does deep dives into a lot of the docs.
He probably knows a lot more details about this case then a lot of us, yet he posts this easily refutable claim. His supposed to be a "Game Journalist" as well.
He probably knows a lot more details about this case then a lot of us, yet he posts this easily refutable claim. His supposed to be a "Game Journalist" as well.
MasterCornholio
Member
I can agree that it took many by surprise. I thought it was going to go through when they dropped Sony from the argument. But the cloud was always a point made by the CMA even early on. It wasn't a last minute addition that was impossible to predict.
feynoob
Banned
I don't get his view point at all.
He switches his side with each article.
DeepEnigma
Gold Member
That entails the issue. Tweaktown has been a shadow of what they were the past 5+ years.
adamsapple
Or is it just one of Phil's balls in my throat?
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