Inside Arbitrage M&A Deal Metrics

TARGET: Activision Blizzard, Inc. (ATVI) $80.92 ACQUIRER: Microsoft Corporation (MSFT)
TARGET: Activision Blizzard, Inc. (ATVI) $80.92
ACQUIRER: Microsoft Corporation (MSFT)

The acquisition of Activision Blizzard (ATVI) by Microsoft Corporation (MSFT) for $68.7 billion or $95.00 per share in cash.

Announced Date
1/18/22
Expected Closing Date
6/30/23
Closing Value
$68.7 B
Acquisition Price
$95.00
Return
17.40%
Annualized Return
19.97%
Premium
45.28%
Premium (30 Day average)
46.00%
TARGET COMPANY PROFILE DEAL TYPE: Cash
Sector
Communication Services
Industry
Entertainment
Last Price
$80.92
Target Volume
5,624,082
Market Cap *
$50.93 B
Enterprise Value *
$44.54 B
Options
Yes
Annual Dividend
0.58%
Price/Sales *
5.60
EV/EBIDTA *
13.07
Price/Sales (Sector Median) *
1.70
EV/EBIDTA (Sector Median) *
10.41
Announced Date
1/18/22
Expected Closing Date
6/30/23
Closing Value
$68.7 B
Acquisition Price
$95.00
Return
17.40%
Annualized Return
19.97%
Premium
45.28%
Premium (30 Day average)
46.00%
TARGET COMPANY PROFILE
TARGET COMPANY PROFILE
DEAL TYPE: Cash
Sector
Communication Services
Industry
Entertainment
Last Price
$80.92
Target Volume
5,624,082
Market Cap *
$50.93 B
Enterprise Value *
$44.54 B
Options
Yes
Annual Dividend
0.58%
Price/Sales *
5.60
EV/EBIDTA *
13.07
Price/Sales (Sector Median) *
1.70
EV/EBIDTA (Sector Median) *
10.41
* at announcement

Open in: SeekingAlpha Yahoo Finance Fidelity MorningStar

* at announcement

Open in: SeekingAlpha Yahoo Finance Fidelity MorningStar

MERGER SPREAD CHANGES
EVENT(S) TIMELINE
Event
Status
Date / Expected Date
Approved
Apr 28, 2022
FUNDS WITH A POSITION IN Activision Blizzard, Inc.
1. Alpine Global Management, LLC
2. Gabelli Funds LLC
3. Harvest Management LLC
4. Magnetar Financial LLC
5. Oz Management LP
6. P Schoenfeld Asset Management LP
7. Pentwater Capital Management LP
8. Sand Grove Capital Management LLP
9. TIG Advisors, LLC
10. Tudor Investment Corp ET AL
11. Twin Capital Management Inc
12. Cheyne Capital Management (UK) LLP
DEAL UPDATES
Activision Blizzard, Inc. merger details:

Expected to close in fiscal year 2023 for a closing value of $68.7 billion. Upon completion of the deal, shareholders of Activision Blizzard will receive $95.00 per share in cash.

Merger Agreement

Activision Blizzard, Inc. Investor Relations

Microsoft Corporation Investor Relations

Termination Fee:

Company Termination Fee (To be paid by Activision Blizzard): $2.27 billion

Parent Termination Fee (To be paid by Microsoft)

i) if termination notice is provided prior to January 18, 2023: $2 billion

ii) if termination notice is provided after January 18, 2023, and prior to April 18, 2023: $2.5 billion

iii) if termination notice is provided at any time after April 18, 2023: $3 billion

Update(s)

January 31, 2022: According to Bloomberg, The U.S. antitrust review of Microsoft Corp's (MSFT) proposed acquisition of Activision Blizzard (ATVI) will be handled by the Federal Trade Commission (FTC).

March 3, 2022: Activision Blizzard (ATVI) and Microsoft (MSFT) each received a request for additional information and documentary material (“Second Request”) from the FTC in connection with the FTC’s review of the transaction. The effect of the Second Request is to extend the waiting period imposed under the HSR Act until the 30th day after substantial compliance by Activision Blizzard and Microsoft with the Second Request, unless the waiting period is terminated earlier by the FTC or as otherwise agreed between the parties and the FTC. Completion of the transaction remains subject to the termination or expiration of the waiting period under the HSR Act and the satisfaction or waiver of the closing conditions specified in the merger agreement. The parties expect to complete the transaction in Microsoft’s fiscal year ending June 30, 2023.

March 8, 2022: According to The Wall Street Journal, Federal prosecutors and securities regulators are investigating large bets that Barry Diller, Alexander von Furstenberg and David Geffen made on Activision Blizzard (ATVI) shares in January, days before the videogame maker agreed to be acquired by Microsoft (MSFT).

March 21, 2022: Activision Blizzard (ATVI) announced that the special meeting of stockholders, to consider and vote on a proposal to adopt the Agreement and Plan of Merger with Microsoft Corporation (MSFT), will be held on April 28, 2022.

March 31, 2022: According to The Wall Street Journal, four U.S. senators sent a letter to the Federal Trade Commission citing concern about Microsoft’s (MSFT) proposed acquisition of Activision Blizzard (ATVI), saying the deal could undermine employees’ calls for accountability over alleged misconduct at the videogame company.

April 14, 2022: SOC Investment, an activist shareholder group urged investors to vote against the proposed Activision Blizzard (ATVI) and Microsoft (MSFT) merger during Activision’s upcoming meeting on April 28.

April 28, 2022: Activision Blizzard (ATVI) announced that its stockholders approved Microsoft Corporation’s (MSFT) proposal to acquire Activision Blizzard.

July 6, 2022: Bloomberg reported that the UK competition regulator has opened an investigation into Microsoft’s (MSFT) purchase of Activision Blizzard (ATVI) joining other regulators in scrutinizing the deal.