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The stock price of Activision Blizzard Inc. decreased further from the suggested acquisition price by Microsoft Corp. Investors are growing more concerned that American antitrust authorities would scuttle his $69 billion deal.
The shares of the video game developer dropped 4.1% on Friday to $73.47, and Microsoft Corp. made an offer of $95 per share to the business. Politico stated that the US Federal Trade Commission is probably going to file an antitrust complaint to stop the sale after the market closes on Wednesday.
A merger arbitrage specialist at Cowen, “the FTC block was mostly priced into the spread, but not totally.” I wanted to take the lead.
The market has calculated about a 40% chance of a successful trade, based on the assumption that the stock will trade at $60 if it fails, Glick said. Increased antitrust scrutiny in the U.S. and Europe since the deal was announced in January, the size of the deal and the lengthy closing process have widened the gap between Activision’s retail price and Microsoft’s cash offer. The broader downturn in the tech industry has also prompted investors to price in greater downside risk if deals go awry.