Ryuu96 said:
They have a legal responsibility to do everything they can which is in the shareholders best interest. Shareholders best interest right now is this deal going through. If they quit now, when the valuation is at $90+ a share, and tank the valuation back down to mid 70s, right at the final hurdle, then Activision's CEO and Board have caused damaged to shareholder value which was easily unavoidable. The company has to answer to its shareholders and they don't get that $3bn. The valuation loss would far exceed the $3bn that Microsoft gives them and that affects every single shareholder. There is therefore a legal responsibility holding Activision back from terminating the deal and a financial one, it is in their best interest to extend the deal at this stage of the game rather than taking $3bn but tank their company value. Activision "feeling" they can get a better deal is irrelevant to shareholders, they would need proof, they would need to show they have a better deal, not just words, it would have to be backed up by action and proof. They can't just be like "oh, we might get a better deal so for now, all of you will have to suffer incase we maybe get a better deal" And right now the odds of them getting a better deal are slim to none. They need to find a company that not only has the money to outbid Microsoft at $95 a share, but also one which is even interested and one that also wouldn't face regulatory scrutiny for another 6-12 months. There are few companies who match that criteria and they'd need that offer now, not later. It'd likely have to be a decent outbid too, I don't think another company could simply do $96 a share versus Microsoft's $95 a share because Microsoft's current offer will almost certainly be wrapped up next month whilst a new offer will be another 6-12 months of regulatory scrutiny, uncertainty and people want to be paid out now. Not to mention as I said, Activision was acquired during a period of exploding growth and shit interest rates, times have changed and that decreases the amount of suitors even further as to who is willing to spend that much in the current climate. Activision could be acquired for lower, but right now you're asking someone to beat $95 a share, that's a tall order. Activision-Blizzard has a legal responsibility to do everything in their power to get the deal through, the termination fee has specific reasons however as to how either side would be paid out and that's usually if there's no path forward for the deal. Now that the timeline is about to be met, they'll be no restrictions and Activision can back out for any reason. Your mistake here is treating today as if things were a few months ago when Activision's stock was nowhere near Microsoft's offered price and they had multiple block attempts against them, if the deadline had passed then, maybe we would see Activision stop because the share price wouldn't drop so hard and they could be more justified with the CMA/FTC blocks against them. However things are far different now, the stock price is at $90+ now because the vast majority of shareholders now believe this deal is going through, they're right at the finish line, this deal will pass in either July or August, everyone can see that but they couldn't a few months ago, it makes it a lot harder for Bobby to justify backing out now, $3bn or not. |
Ryuu, nothing you state means that ABK cannot still walk away from this deal. There is nothing locking ABK now to MS besides their belief that the deal will make it to the finish line. ABK responsibility is still to get the best deal possible and mind you there are other big players who would gladly pay the price now that they know the publisher is up for sale.
There is no need to have a contract in place to prevent both parties from leaving the merger unless there is a real scenario where either party could just up and leave at any time during the process. here is no need to renegotiate an extension to the previous deal if there is not a serious case where ABK could leave the merger. If I remember ABK got sued when they accepted the merger and that got no where. I am sure if ABK decides to leave the merger getting sued would also go no where because because ABK can decided to stay or go at anytime no matter what. The thing is I am not sure if that needs to go to a vote but if so then the likelihood of a lawsuit is even less if they voted yes.
Also we need to look at ABK structure. This line where ABK as a company has to answer to shareholders is not true. Not all companies shares have voting rights and not all companies have to jump at the whims what shareholders want. Its the same as people kept talking about MS shareholders wanting the Xbox division gone. MS never cared about such things because shareholders do not have enough voting rights to direct the company or the divisions.
We will see if another deal gets done but like I said, when there is big money on the line and other suiters who probably would be happen to get ABK, in order for ABK to stay in the deal, it will be interesting to see who has the bigger leverage. The fact we have not heard about another deal being set I believe is not because either ABK and MS feel no hurry. I believe both companies are throwing around some big numbers and they have not come to a resolution yet. ABK could be seriously asking for the world and MS could be saying stick to the original deal. Who blinks in these negotiations will be the winner.
