Microsoft's purchase of Activision Blizzard is bogged down, yet some traders are betting the deal ultimately will go through.
Microsoft Corp.’s purchase of Activision Blizzard Inc. is bogged down, yet some traders are betting the deal ultimately will go through. If they’re right, there’s serious money to be made, given that the videogame company’s shares are still almost 20 per cent below the offer price.
“Given the deal’s sheer size and heightened antitrust scrutiny towards big tech players, that’s ultimately causing the very large spread,” said Julian Klymochko, chief investment officer at Accelerate Financial Technologies Inc. To be sure, one of the widest arbitrage spreads in technology mergers has nothing to do with regulatory hurdles.
The slump in the tech sector also hasn’t helped with deal spreads. The Nasdaq 100 Index is down 19 per cent this year, forcing investors to price in a greater downside risk to Activision shares if the deal falls apart, Klymochko said.
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