What's Going On With Microsoft-Activision Deal? Companies Adjust Deadline Terms

Microsoft Corp MSFT and Activision Blizzard, Inc ATVI stocks are grabbing attention amid reports of the companies extending the $69 billion takeover deal to October 18.

The terms of the agreement include an increase in the termination fee payable to Activision Blizzard from $3.0 billion to $3.5 billion if the transaction is terminated after August 29, 2023, and to $4.5 billion if the transaction is terminated after September 15, 2023. 

Also Read: Warren Buffett's Berkshire's Missed Gains: Buffett Sells Majority of Activision Blizzard Stake Before Microsoft Deal Approval

The agreement also includes amendments to Activision Blizzard's commercial Xbox arrangements with Microsoft, valued at up to $250 million for FY23 and FY24. 

The deal further enables Activision Blizzard to declare and pay one regular cash dividend for FY23 of up to $0.99 per share before, not contingent on the transaction's closing.

Activision clocked second-quarter revenue growth of 34.2% year-on-year to $2.21 billion, driven by the launch of Diablo IV. However, the revenue missed the consensus of $2.37 billion. Adjusted EPS of $0.91 beat the consensus of $0.88.

Activision's Q2 net bookings were $2.46 billion versus $1.64 billion a year ago. In-game net bookings were $1.56 billion, against $1.20 billion a year earlier.

Activision's Monthly Active Users (MAUs) were 356 million versus 361 million a year ago.

Activision generated $590 million in operating cash flow.

Britain's competition regulator, the Competition and Markets Authority, opposed the merger but agreed to a stay on Microsoft's appeal to allow more time to resolve their dispute.

Microsoft forged deals with Nvidia Corp NVDA and Sony Group Corporation SONY to crush opposition against the merger.

Price Actions: ATVI shares traded lower by 0.57% at $92.21 on the last check Wednesday. MSFT shares traded lower by 0.07% at $359.31.