Activision Stock Price Rises on Microsoft Deal Hopes
Shares of Activision Blizzard (ATVI:US) trade over 6% higher in recent days after reacting positively to the U.K.’s Competition and Markets Authority (CMA) update pertaining to the Microsoft (MSFT:US) deal.
Activision shares gained on Friday after the UK’s top competition body said it was dropping some of its concerns about the highly-contested deal that would see Microsoft acquire ATVI for $69 billion.
In an update published early Friday, the CMA said the new evidence provided by Microsoft “provisionally alleviates concerns in relation to supply of gaming consoles in the UK.”
“The transaction will not result in a substantial lessening of competition in relation to console gaming in the UK,” the CMA said in a press release.
The regulator added that the new evidence shows that Microsoft’s strategy “would be significantly loss-making under any plausible scenario.” It refers to Microsoft pushing to make Activision’s games, including the Call of Duty (CoD) franchise, exclusive to its Xbox console.
Activision stock price has been trading at a significant discount to the takeout price of $95 per share amid high-risk that the transaction wouldn’t be approved by regulators in the United States, United Kingdom, and European Union.
As such, several Congress members were happy to bet on the positive outcome. Representatives Ro Khanna, Tommy Tuberville, and Alan Lowenthal were all buying ATVI shares in recent months.
For instance, Rep. Tuberville invested $100,000 - $250,000 in ATVI stock when it closed at $72 per share.