There remains some ongoing uncertainty about when—and if—
Microsoft
will complete its pending $69 billion acquisition of the videogame giant
Activision Blizzard.
But the team that managed the Nasdaq 100 stock index isn’t waiting around for the story’s final chapter.
Late Wednesday—9:46 p.m. Eastern time, to be precise—NASDAQ announced that Activision (ticker: ATVI) will be removed from its Nasdaq 100 stock index before the market opening on Monday July 17, replacing it with the digital ad firm
The Trade Desk
(TTD).
The Nasdaq call here seems a wee bit premature. This week, U.S. District Judge Jaqueline Scott Corley denied a request from the Federal Trade Commission to block the deal. In her ruling, Judge Scott wrote that the FTC “has not shown it is likely to succeed” on its assertion that Microsoft will pull Activision’s popular Call of Duty games from Sony PlayStation, “or that its ownership of Activision content will substantially lessen competition in the videogame library subscription and cloud gaming markets.”
The FTC on Thursday filed an appeal with the Ninth Circuit Court of Appeals in San Francisco to overturn the lower court order.
“If a preliminary injunction is not granted, Microsoft and Activision can begin to share confidential business information and long-term strategic planning information and can begin to make plans for exclusivity of Activision content,” the FTC said in its court filing.
Microsoft’s agreement to acquire Activision expires on Tuesday, July 18.
Nasdaq’s decision to make a change in the index apparently reflects Nasdaq’s attempt to follow its own guidelines for how the index is constructed. The guidelines state that “in the case of mergers and acquisitions, the effective date for the removal of an index issuer or security will be largely event-based, with the goal to remove the issuer or security as soon as completion of the acquisition or merger has been deemed highly probable.” It seems likely that the group making decision used the July 18 expiration date as a probable closure date, and so set the July 17 target for index removal.
But traders apparently continue to see some risk that the deal is delayed or otherwise disrupted. Activision shares closed Thursday at $89.54, $5.46 below the $95 target price, a potential 6% return, which would be a strong return if the deal really closes early next week.
Write to Eric J. Savitz at [email protected]
Read the full article here
