SOC Investment Group Asks Activision Blizzard Shareholders to Reject Microsoft Acquisition - News
by William D'Angelo , posted on 14 April 2022 / 3,426 Views
SOC Investment Group in an open letter to Activision Blizzard shareholders asks them to reject Microsoft's proposal to acquire the gaming giant.
Microsoft announced on January 18 of this year its plans to acquire Activision Blizzard in a deal worth $68.7 billion. Activision Blizzard shareholders will now hold a vote to either approve or reject the acquisition later this month on April 28.
"This transaction fails to properly value Activision and its future earnings potential, in significant part because it ignores the role that the sexual harassment crisis—and the Activision board’s incompetent handling of it—has played in delaying product releases and depressing the share price," reads the letter from SOC Investment Group.
"We are skeptical that any transaction with Microsoft (or a similar acquirer) would be viable, given the shift in the climate of anti-trust enforcement, as well as evident sources of potential harms to competition stemming from the merger.
"Activision shareholders would be better served by replacing the incumbent board with directors that would allow the company to assume its real potential, including actively engaging with and empowering Activision Blizzard employees in their effort to rebuild the corporate culture and restore the company’s reputation."
SOC Investment Group argues Microsoft's offer doesn't properly value Activision Blizzard as it is only a premium on stock value due to drop in the stock in the latter half of 2021.
For much of the first half of 2021, the Activision Blizzard stock value was in the $90 to $100 range. Microsoft's deal is to buy Activision Blizzard shares at $95 each.
"Consequently, we do not believe that Activision shareholders should be looking to a transaction to rebuild the value lost by Activision management’s failure to ensure workplace safety and equity and by the board’s failure to respond constructively to the burgeoning crisis," added SOC Investment Group.
"But we also observe that at least since last July, Activision employees have courageously demanded that harassment and retaliation at the company end and that they have a decisive role in reshaping the corporate culture going forward.
"We believe that only by constructively engaging with its workforce—the one asset that Activision cannot sell but without which the company cannot operate—can the company begin a genuine turnaround and restore investors’ confidence in its reputation and operations.
"We urge you to join us in rejecting the Microsoft merger proposal and electing a new, competent, and dedicated board of directors at Activision Blizzard’s next annual meeting."
A number of US Senators have expressed their concerns over Microsoft's proposed acquisition of Activision Blizzard.
"We are deeply concerned about consolidation in the tech industry and its impact on workers," reads a letter from Senators Elizabeth Warren, Bernie Sanders, Cory Booker, and Sheldon Whitehouse to Federal Trade Commission chair Lina Khan.
The Senators added the acquisition could "exacerbate the flurry of sexual-abuse, harassment and retaliation allegations at Activision stemming from recent federal and state investigations."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
More Articles
Worth noting that this is the same investment group that publicly called for Kotick to be fired several months ago and currently controls a 0.8% stake in ABK.
I think this is an activist investor group trying to draw more attention to itself
Yah they are useless :) Just making noise...
You guys did a great job of getting rid of bobby, dind'tcha?.
Tough luck, SoC, you had your chance.
Bet acquisition still goes through anyways .
From what I understand Activision came to MS to sell. So I assume they already have enough people who agree and want to sell as well.
