Rumor: Bobby Kotick 'Will Absolutely Remain' as Activision CEO If Microsoft Deal Falls Through - News
by William D'Angelo , posted on 10 February 2023 / 6,173 Views
Following the announcement of Microsoft's proposed acquisition of Activision Blizzard, there was a report from The Wall Street Journal claiming Activision Blizzard CEO Bobby Kotick would leave the company once the deal closes and Activision Blizzard is officially part of Microsoft and Xbox.
Fox Business is now claiming that Kotick will remain as the CEO of the gaming giant if the deal were to fall through.
The report claims that "sources close to the situation" have stated that if the deal were to fail Kotick "will absolutely remain at the gaming giant to run the company."
The sources also say they are confident the deal will be approved once the Competition and Markets Authority (CMA) of the UK looks at the numbers and realizes the deal will not harm gamers. They said the CMA is "the only regulatory body that really matters."
The CMA this week released its provisional conclusion on Microsoft's Activision Blizzard acquisition.
The CMA concluded the deal could put Microsoft in an even stronger position in cloud gaming and could stifle competition in the growing market, which in turn could harm UK gamers who are unable to afford consoles. It could also weaken the rivalry between Xbox and PlayStation in the video game console market and the CMA says this could also harm UK gamers.
The deal if approved "could result in higher prices, fewer choices, or less innovation for UK gamers," according to the CMA.
The Microsoft acquisition of Activision Blizzard has also faced scrutiny by the Federal Trade Commission (FTC) in the US and European Union regulators.
The FTC in December announced it was looking to sue to block Microsoft's acquisition of Activision Blizzard as it would give Microsoft the ability to suppress its competitors in gaming. The FTC pointed to Microsoft's record of acquiring and using gaming content to suppress content from rival consoles, including its acquisition of the parent company of Bethesda Softworks, ZeniMax Media.
European Union regulators in a recent report issued a formal antitrust warning to Microsoft over its Activision Blizzard acquisition.
A Microsoft spokesperson in a response to the formal antitrust warning said it is committed to "finding a path forward" and is "confident" it will be address the concerns from the European Union regulators.
This formal antitrust warning was expected and Microsoft was already reportedly looking to offer remedies to concerns by the European Union regulators.
The deal has been approved in Brazil, Chile, Saudi Arabia, and Serbia.
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 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Board of Directors and shareholders didn't get rid of him before, so no reason to get rid of him if the deal falls through.
There's only one way you're getting rid of Kotick.
He owns about 0.5% of shares, I'm sure they will remove him when this takeover fails and the shares slump.
As much as I want to believe that, I highly doubt it. Shares have slumped multiple times, dramatically even, over the insanely long list of issues at the company over the past several years, and they've only doubled down on support of Kotick. The dude knows how to make money, and that's all the BoD care about. And with Diablo IV releasing in June, and a full CoD release confirmed for 2023, insane revenue is heading ActiBlizz's way.
Yup.
Shares may dip a little but they will instantly rebound on Diablo IV and then the next CoD. Activision is doing incredibly well still and they are projected as a good buy even on the basis of this deal failing.
Not to mention that if the deal fails, Microsoft owes Activision $3bn in cold hard cash, that is more than a typical years worth of Net Income for Activision.
The Board and Shareholders hugely voted in favour of keeping Bobby already as well, they have protected him numerous times, even after the controversy.
I want Bobby gone as much as everyone else but the shitty truth is that he is simply a good businessman and made Activision the juggernaut it is today, that is all these money hungry people care about, they don't care about temporary negative PR.
According to the lawyer fella on ResetEra.
The transaction can be terminated by MS or ABK if:
- Both parties agree.
- A court or a regulator rejects the deal and there is no way to appeal it.
- There is a new law that prohibits this kind of deal.
-
By January 18th 2023 or April 18th 2023 the deal is still pending but NOT for regulatory reasons.
The transaction can be terminated by MS if:
- There is an infringement of the agreement by ABK and during the period to resolve that, ABK doesn't do anything.
-
The Activision Blizzard Board of Directors doesn't recommend the deal anymore.
If the deal doesn't happen, someone has to pay for it.
Microsoft has to pay Activision Blizzard a termination fee of:
- $2,500,000,000, if the termination notice is provided after January 18th, 2023 and prior to April 18th, 2023.
-
$3,000,000,000, if the termination notice is provided after April 18th, 2023.
Reasons for this possible termination fee in favour of ABK: - A court or a regulator rejects the deal and there is no way to appeal it.
- There is a new law that prohibits this kind of deal.
- MS infringes the agreement.
-
Regulatory conditions were not satisfied and the reason is a breach by MS.
No matter what happens, someone is being paid, even if a regulator blocks the deal, even if Microsoft can't appeal the block, they owe Activision $2.5bn minimum.
Even if it weren't that, there are avenues to appeal all regulatory bodies, so ultimately at this stage of the deal, excluding a major fuck up by Activision or Activision backing out of the deal, Microsoft is paying ABK no matter what if the deal fails.
A bungie worthy of fine, that is huge
I can't say for sure on this deal, maybe something is structured differently here. But, I have been following mergers and acquisitions for my entire adult life as an investor, and I have never heard of a situation where the suitor has to pay if a deal does not close due to a regulatory block.
I suppose it's possible. But, if that's the case, I am even more confident that the deal will close. There is no way in hell that Microsoft would agree to take on that kind of risk if they weren't absolutely certain the deal will close. Those kinds of fees are in every merger or acquisition deal to prevent things like Musk attempted to do with his purchase of Twitter - change his mind.
Yeah, I don't know much about this stuff aside from what I've read others say, the fella on ResetEra (Idas), I believe specialises in M&A (American) and there are two others in there, Pixis and another guy I forget the name of, neither of them have corrected him though. Not sure if HoegLaw commented on it.
I'm sure Microsoft was extremely confident in it passing too back then but eh, feels like a lot of things have not gone the way they were expecting lately, Lol.
Think I found it.
If the merger agreement is terminated in specified circumstances, Microsoft has agreed to pay Activision Blizzard a reverse termination fee of (i) $2,000,000,000, if the termination notice is provided prior to January 18, 2023, (ii) $2,500,000,000, if the termination notice is provided after January 18, 2023 and prior to April 18, 2023 or (iii) $3,000,000,000, if the termination notice is provided after April 18, 2023.
Activision Blizzard will be entitled to receive the reverse termination fee from Microsoft if the merger agreement is terminated:
by either Microsoft or Activision Blizzard due to (1) a permanent injunction or other judgment or order arising from antitrust laws having been issued by a court or other legal or regulatory restraint or prohibition arising from antitrust laws preventing the consummation of the merger being in effect, or any action having been taken by a governmental authority arising from antitrust laws that, in each case, prohibits, makes illegal or enjoins the consummation of the merger and that has become final and non-appealable; or (2) any statute, rule, regulation or order arising from antitrust laws having been enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation of the merger, except that this termination right will not be available if the terminating party’s material breach of any provision of the merger agreement is the primary cause of the failure of the merger to be consummated by the termination date;
https://investor.activision.com/node/35156/html#tRTF
Thats just sad. Its sounds like they are using this as a threat to make sure the deal goes through.
If you don't pass this deal then Bobby will remain as CEO.
Bobby must feel great /s, knowing hes so despised that he is used as a bargaining chip
removing Kotick and other management is absolutely one of the biggest reasons why the deal should go through. If the acquisition fails, Activision and Blizzard devs are absolutely fucked and nobody will ever want to work there.
His dead eyes give me the creeps.
That's because he's not human, he's a cockroach that somehow gained sentience.
Is that a threat?
Ridiculous to try and use Kotick as bargain bin.
Thanks Sony.
Do not make blanketed statements like this. It will simply cause more trouble where there wasn't any.
This is why I wanted the deal to go through to begin with. Last chance to get rid of this bitch.
Even if the deal goes through he might not leave Actibliz.
