Is this still getting done Monday in the states at least? Seem both MS and CMA will probably agree to a extension to get it done fully.
Waitied this long aleady so, i’m cool if it takes a while longer to get fully done with worldwide.
What I’m hoping for is that the meeting Monday is to allow Microsoft to close world wide, by having the CMA rescind their order.
While MS/ABK operate as separate entities in the UK until the whole new offer is finished being reviewed and approved.
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No, you dont need to believe that. ABK and Bobby have no incentive to agree to extend. They can literally just let the agreement date pass and either stick around as long waiting as they want or bolt whenever they want.
One of the three things below will happen:
A. Close before the agreement expires, potentially have some lost good will with a regulator in the UK.
B. Provide significant additional financial compensation to ABK to extend.
C. Accept the risk that ABK walks with 3 billion dollars and blows 18 months of a massive amount of time energy, business planning, and political favors that were spent.
Option C is a no go, there’s not a business out there that will take that risk. That makes the options a or b.
I think you explore both. There are options to get the CMA to allow the acquisition to close while they start the new investigation. Agreement on one of those avenues is most preferable and may be most preferable for all parties involved. It removes the possibility of the CMA looking weak again and obviously helps Microsoft.
If that isnt an option the CMA will take then you find out what the number is for ABK to extend and if its high then you close over based on the low historical penalties (even recent) for closing over. Some people have commented about wanting to maintain good regulatory relations, but it never did any good throughout and they’ve had excellent relations. There’s also frequently change in such positions.
What makes you think significant additional financial compensation is required for ABK to extend?
You seem like you’re imagining ways for this deal to go south.
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You are right that no way MS nor ABK are going to cruise into the expiration date without an extension that binds both MS and ABK from dropping the deal if not closing on the 18th.
But why would MS have to provide additional financial compensation for such an extension?
Why are you so sure ABK has no incentive to agree to extend? The general opinion is the party with less incentive is MS, not saying that they want to walk away, but there are way many articles asking MS to consider dropping the deal (to put the money into AI) than calls for ABK to drop the deal, I also remember seeing the percentage of shareholders voted yes to the deal is super high. And if the deal falls through, ABK being the party that is being acquired is the one that gets most of the damage in its share price, way more than the 3 billion to cover, it would take years to recover with many unknown risks, why would they choose that over the a short extension?
Exactly. I would understand it if there were still a lot of ? In the way of the deal to close but when MS have already defeated the FTC, considerably weaken the arguments against the deal and seemgly found a way to close it “legally” in the UK without jeopardizing your reputation in said country for future business strategies I dont think is crazy to think both parties could wait a couple of weeks at most to get to the finish line smoothly.
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Way I see it it is easier to write that MS should break UK law and close over the CMA than it probably is to actually do it. Doing so risks the deal being broken apart down the line.
I suspect that MS and ABK will agree to extend at board level with no shareholder involvement and there will be no additional costs, or very minimal ones.
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Everytime something generates uncertainty or anxiety here about the deal i just go to a ATVI ticker. Still at 93$ after market. Wall Street is not fool proof but they think this will close in short time 
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There’s always the possibility that the CMA will give its written consent on Monday.
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Oh I agree and hopefully that is what happens. I’m sure MS have discussed that with them. But as Florian said to do so would be significant precedent and they may well choose not to.
I was the nervous nelly on the whole FTC thing. Learnt to trust MS knows exactly what they are doing whatever happens monday.
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We’ll see. I’m sure MS is in talks with the CMA and the UK government to let them close on time. This situation should teach the CMA a lesson - don’t block acquisitions just because and present actual theories of harm to justify the block.
I’m not against regulation, but it should be done properly:
- 80% of the final report is about the console market
- the CMA clearly miscalculated xcloud’s marketshare
- the CMA did not reach out to the cloud market participants, yet talked with Xbox’s console rivals extensively
Whatever precedents are created to help companies push back against the CMA in the future, the CMA has earned it with its boneheadedness.
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Actually, I do think there were about 3 or 4 unknown parties that tried to buy ABK, Microsoft was just faster than they were. I believe Hoeg had the details in one of his videos. Also, there are investors that could try for this acquisition other than Microsoft not necessarily all cash though.
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I’ve explained that multiple times in my last several messages. Theres no need for Activision to extend the agreementbas they have flexibility beyond July 18th. They are able to stick around if they want or walk if they want.
On the other hand, Microsoft has a lot to lose and would want to minimize risk by getting it in writing that ABK extends the dates and enaures they dont walk. You dont get a company to give up something for free, so if Microsoft wants ABK to sign off on extending the agreement and giving up their flexibility, then they have to give ABK something.
The last several posts have not been about ways for the deal to fall through. They’ve been about why it makes significantly less sense to go beyond July 18th for closing.
My personal opinion is that Microsoft doesn’t want to close over any regulator and I believe the deal will be extended simply because there’s a lot of shareholders and high level executives that want their massive payday and will leave once it all goes through. These people aren’t dumb enough to sacrifice $70B for $3B. In the extended period, Microsoft will work out a deal with CMA to probably unload their Cloud Gaming segment or whatever in order for the acquisition to close worldwide and not have to go over any regulator.
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Yeah, I guess I don’t understand your rationale so this likely isn’t going to go anywhere.
You make it sound like MS is invested in the deal and ABK isn’t, which doesn’t make sense to me at all. What is ABK losing by extended the deal? Do you think they don’t benefit from this deal at all?
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I think they both benefit from the deal. However, only Microsoft benefits by getting it written down that the two parties will extend. ABK can continue with the deal without signing an extension. There isnt an incentive to do otherwise. Thats why Microsoft would need to provide such an incentive (probably cash).
The only thing I remember hearing about buying was someone wanted to buy a specific part of ABK (likely for much less that Microsoft offered for share price), not the whole company. Everyone else was pretty much not interested because they were not willing to match Microsofts price.
If ABK does walk imo, no one will offer the same amount as Microsoft. They would use whatever the share drops down to as the reason why and proceed offer a 2/3 of the current value, ABK refusing could end up like Yahoo.
Yahoo end up selling for 4.5 billion years after Microsoft offered 44. 6 billion, while I don’t think it will be as bad. ABK will not be offered 68 billion for any future sales of their company if they walk away.
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ABK would probably struggle to get the same offer it currently has today from anyone. MS included. The offer they have now was made at the peak of the COVID tech boom.
I understand there’s value to extending and increasing certainty but I don’t really see how any one party to this is benefiting significantly more than the other and therefore would value the assurance more than the other.
ABK wanted to be bought. MS was the only serious option after they looked around. Both parties are very motivated IMO.
I could see an extension with an amount to be paid if the deal doesn’t close. I don’t see Microsoft needing to pay immediately to get an extension. Just security in case the CMA ultimately kills its (somehow).
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