Xbox’s intent to buy Activision Blizzard Group surprised the video game industry and business community with its potential impact and the whopping $69 billion at stake. However, the transaction has not yet been formalized as the FTC (Federal Trade Commission) must now examine in detail the viability of the acquisition in order to complete the process by fiscal 2023, if the latter is validated. The obstacle course isn’t over for Xbox as a new organization attempts to cancel the transaction and it has to be admitted that the arguments made are admissible.
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Investment group SOC is urging Activations shareholders to vote against the Xbox takeover
That’s why SOC Investment Group issued a press release today to express its opposition to Xbox’s acquisition of Activision Blizzard for $68.7 billion. While the FTC is thoroughly investigating the terms of the acquisition to ensure it complies with the legal framework, SOC is now asking all Activision shareholders to vote against the acquisition at its annual stockholders meeting in exactly two weeks, on April 28th.
This meeting will be key to subsequent negotiations as the merger agreement will require approval by Activision Blizzard’s majority stockholders.
SOC Investment Group cites several reasons for this position, including Bobby Kotick’s group’s response to recent allegations of sexual harassment and discrimination. At the end of last year, the investment group called for the resignation of Bobby Kotick, as well as CEO Brian Kelly and independent chief executive Robert Morgado.
SOC Investment Group says it is “skeptical about the feasibility of a transaction with Microsoft (or a similar acquirer) given the changing antitrust enforcement climate and the apparent sources of potential competitive harm arising from the merger.” The FTC was recently approached by four US senators who expressed concern that the takeover is already hampering organizing efforts and “threatening worker accountability” over allegations of sexual misconduct and discrimination. In a letter published on Thursday, SOC Investment Group explained its position.
“This transaction does not properly value Activision and its potential for future earnings, in large part because it ignores the role that the sexual harassment crisis — and the incompetent management of Activision’s board of directors — has played in delayed product releases and lower stock prices. We do not believe that Activision shareholders should consider a transaction to rebuild the value lost through Activision management’s failure to ensure safety and fairness in the workplace and through the board of directors to constructively to respond to the emerging crisis. But we also see that, at least since last July, Activision employees have been boldly demanding that harassment and retaliation within the company stop and that they play a critical role in transforming the company’s culture. We believe that only by working constructively with its employees – the one asset Activision cannot sell but without which the company cannot function – will the company turn the tide and restore investor confidence in its reputation and operations can. We invite you to join us in rejecting Microsoft’s merger proposal and electing a capable and committed new board of directors at Activision Blizzard’s upcoming annual meeting. »
The statement by SOC Investment Group is clear, direct and could clearly affect the vote at the April 28 AGM. The recent setbacks in the Activision Blizzard lawsuit may not help the situation, quite the opposite. It remains to be seen what the investment group’s real intentions are and whether it serves other interests. To be continued in the next few days.