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- Activision Blizzard: SOC Investment Group calls for vote against Microsoft Xbox acquisition
Activision Blizzard: SOC Investment Group calls for vote against
SOC Investment Group has urged fellow Activision Blizzard shareholders to vote against Microsoft's proposed Xbox merger. The investor believes the deal is not up to the company's potential and is not the solution to the company's problems.
The SOC Investment Group has been highly critical of Activision Blizzard since the recent sexual harassment and discrimination lawsuits (which we recall are mostly still ongoing), and last November called for the resignation of its most notable directors, including CEO Bobby Kotick, board chair Brian Kelly, and independent director Robert Morgado.
SOC Investment Group wrote a letter to fellow shareholders urging them to reject the proposed merger for two reasons. "This transaction fails to properly value Activision and its future earnings potential, in part because it ignores the role that the sexual harassment crisis - and the incompetent management of Activision's board - played in delaying product releases and lowering the stock price," SOC argued.
The investment group also said it is "skeptical that any transaction with Microsoft (or a similar buyer) is feasible, given the change in the antitrust enforcement climate, as well as the obvious sources of potential competitive harm from the merger."
Recall that Microsoft has said it hopes to complete the deal in the first half of 2023. The U.S. Federal Trade Commission (FTC) is handling an antitrust review to determine whether the acquisition would give Xbox an unfair competitive advantage.
Four U.S. senators recently wrote to the FTC to express concern about the proposed merger, which they say has already hindered unionization efforts and "threatened workers' accountability claims" regarding allegations of sexual misconduct and discrimination.
In its letter on Thursday, SOC said, "We do not believe Activision shareholders should aim for a transaction to rebuild the value lost as a result of the failure of Activision's management to ensure safety and fairness in the workplace and as a result of the board's failure to respond constructively to the nascent crisis."
"But we also note that, at least since last July, Activision employees have been courageously calling for an end to harassment and retaliation at the company and playing a decisive role in reshaping company culture going forward."
"We believe that only by constructively engaging with its workforce - the one asset Activision cannot sell but without which the company cannot operate - can the company begin a real turnaround and restore investor confidence in its reputation and operations."
"We invite you to join us in rejecting Microsoft's merger proposal and elect a new, competent and dedicated board of directors at Activision Blizzard's upcoming annual meeting."
Recently, we also found out that the governor of California has been accused of interfering in the lawsuit against Activision.
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