Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration
Hedge funds, which make profits by speculating on precarious takeovers, got a treat this week when Microsoft Corp (MSFT.O) agreed to buy "call of duty" maker Activision Blizzard (ATVI.O) for US$68.7 billion dollars in cash. The transaction requires antitrust laws.
Approved in the United States and other major jurisdictions, including the European Union and China. It comes at a time when President Joe Biden's administration is taking a closer look at large mergers, blaming some of them for raising prices to consumers that are fueling inflation.
Activision's shares ended trading at $82.15 on Wednesday, well below the $95 per share deal price, reflecting concerns that regulators may shoot down a combination that would create the third biggest gaming company, after Tencent and Sony Group Corp (6758.T).
This infers a 57% chance of the deal closing, based on Activision's closing share price of $65.39 before the deal was announced.
The wide spread gives investors willing to bet on whether the deal will be completed the opportunity to score double-digit returns. At a time when so-called merger arbitrage strategies have trailed the broader stock market's returns, it is an attractive but also risky proposition.
Last year, merger arbitrage funds returned nearly 10% according to Hedge Fund Research data, beating returns posted in 2020, 2019 and 2018, but trailing the broader S&P 500 stock market's 27% gain in 2021.
For some investors, Aon's (AON.N) scuttled $30 billion acquisition of Willis Towers Watson (WTY.F) as the U.S. Justice Department sued to block the deal hurt returns.
Now they are looking to come back, hoping that this deal will also force competitors into making deals of their own.
"The positive outlook for event-driven and merger-arbitrage oriented firms in 2022 has been accelerated with the Microsoft-Activision deal," said Hedge Fund Research Inc President Ken Heinz.
Microsoft and Activision gave themselves until June 2023 to complete the transaction, giving hedge funds months to handicap how regulators will react to Microsoft bundling its Xbox platform with Activision's popular games, such as World of Warcraft and Diablo.
Investors may get hints on the Biden administration's stance soon as the Federal Trade Commission is expected to weigh in on defense contractor Lockheed Martin's (LMT.N) planned $4.4 billion acquisition of Aerojet Rocketdyne (AJRD.N) and the Justice Department will decide on healthcare insurer UnitedHealth's (UNH.N)$13 billion bid for healthcare analytics and technology vendor Change Healthcare (CHNG.O).
Coverage finds such as Millennium, Tiesemann consultant and pentwater capital spend a piece of their fusion bets, and many have occupied Microsoft and Activision for some time.Mutual funds The Merger Fund run by Westchester Capital Management and The Arbitrage Funds run by Water Island Capital offer similar strategies.
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Microsoft to gobble up Activision in $69 billion metaverse bet
(Mike Blake, Reuters)
Microsoft Corp (MSFT.O) is buying "Call of Duty" maker Activision Blizzard (ATVI.O) for $68.7 billion in the biggest gaming industry deal in history as global technology giants stake their claims to a virtual future.
The deal announced by Microsoft on Tuesday, its biggest-ever and set to be the largest all-cash acquisition on record, will bolster its firepower in the booming videogaming market where it takes on leaders Tencent (0700.HK) and Sony (6758.T).
It also represents the American multinational's bet on the "metaverse," virtual online worlds where people can work, play and socialize, as many of its biggest competitors are already doing.
"Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms," Microsoft Chief Executive Satya Nadella said.
Microsoft, one of the biggest companies in the world largely thanks to corporate software such as its Azure cloud computing platform and Outlook franchise, is offering $95 per share - a 45% premium to Activision's Friday close.
Activision's shares were last up 26% at $82.10, still a steep discount to the offer price, reflecting concerns the deal could get stuck in regulators' crosshairs.
Microsoft has so far avoided the type of scrutiny faced by Google and Facebook but this deal, which would make it the world's third largest gaming company, will put the Xbox maker on lawmakers' radars, said Andre Barlow of the law firm Doyle, Barlow & Mazard PLLC.
"Microsoft is already big in gaming," he said.
However, a source familiar with the matter said Microsoft would pay a $3 billion break-fee if the deal falls through, suggesting it is confident of winning antitrust approval.
The tech major's shares were last down 1.9%.
The deal comes at a time of weakness for Activision, maker of games such as "Overwatch" and "Candy Crush". Before the deal was announced, its shares had slumped more than 37% since reaching a record high last year, hit by allegations of sexual harassment of employees and misconduct by several top managers.
The company is still addressing those allegations and said on Monday it had fired or pushed out more than three dozen employees and disciplined another 40 since July.
CEO Bobby Kotick, who said Microsoft approached him about a possible buyout, would continue as CEO of Activision following the deal, although he is expected to leave after it closes, a source familiar with the plans said.
In a conference call with analysts, Microsoft boss Nadella did not directly refer to the scandal but talked about the importance of culture in the company.
"It's critical for Activision Blizzard to drive forward on its renewed cultural commitments," he said, adding "the success of this acquisition will depend on it."
'METAVERSE ARMS RACE'
Data analytics firm Newzoo estimates the global gaming market generated $180.3 billion of revenues in 2021, and expects that to grow to $218.8 billion by 2024.
Microsoft already has a significant beachhead in the sector as one of the big three console makers. It has been making investments including buying "Minecraft" maker Mojang Studios and Zenimax in multibillion-dollar deals in recent years.
It has also launched a popular cloud gaming service, which has more than 25 million subscribers.
According to Newzoo, Microsoft's gaming market share was 6.5% in 2020 and adding Activision would have taken it to 10.7%.
Executives talked up Activision's 400 million monthly active users as one major attraction to the deal and how vital these communities could play in Microsoft's various metaverse plays.
Activision's library of games could give Microsoft's Xbox gaming platform an edge over Sony's Playstation, which has for years enjoyed a more steady stream of exclusive games.
"The likes of Netflix have already said they'd like to foray into gaming themselves, but Microsoft has come out swinging with today’s rather generous offer," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
Microsoft's offer equates to 18 times Activision's 2021 earnings before interest, tax, depreciation and amortisation (EBITDA). That compares with the 16 times EBITDA valuation of "Grand Theft Auto" maker Take-Two Interactive's (TTWO.O) cash-and-shares deal for Zynga last week.
According to Refinitiv data, the Microsoft-Activision deal would be the largest all-cash acquisition on record, trumping Bayer's $63.9 billion offer for Monsanto in 2016 and the $60.4 billion that InBev bid for Anheuser-Busch in 2008.
Tech companies from Microsoft to Nvidia have placed big bets on the so-called metaverse, with the buzz around it intensifying late last year after Facebook renamed itself as Meta Platforms to reflect its focus on its virtual reality business.
"This is a significant deal for the consumer side of the business and more importantly, Microsoft acquiring Activision really starts the metaverse arms race," David Wagner, equity analyst and portfolio manager at Aptus Capital Advisors said.
"We believe the deal will get done," he said, but cautioned: "This will get a lot of looks from a regulatory standpoint."
This article is copy paste from Reuters Check the original article here
Source: Reuters
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WHO says no evidence healthy children, adolescents need COVID-19 boosters
Photo Credit: Fabrice Coffrini | Reuters
At present, there is no evidence that healthy children and adolescents need booster doses of the COVID-19 vaccine, World Health Organization chief scientist Soumya Swaminathan said on Tuesday.
Speaking at a news briefing, she said that while there seems to be some waning of vaccine immunity over time against the fast-spreading Omicron variant of the coronavirus, more research is needed to determine who needs a booster shot.
"There is currently no evidence that healthy children or heavy adolescents need boosters. No evidence at all," he said.
Israel began offering boosters to children as young as 12, and the U.S. Food and Drug Administration earlier this month authorized the use of a third dose of the Pfizer and BioNTech COVID-19 vaccine for children aged 12 and 15.
Last week, Germany became the latest country to recommend that all children between the ages of 12 and 17 receive a COVID-19 booster shot. Hungary did it too.
Swaminathan said the WHO’s top group of experts would meet later this week to consider the specific question of how countries should consider giving boosters to their populations.
“The aim is to protect the most vulnerable, to protect those at highest risk of severe disease and dying. Those are our elderly populations, immuno-compromised people with underlying conditions, but also healthcare workers,” she said.
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Apple confirms that the iPhone 13 and iPhone 13 Pro do not support noise cancellation during phone calls
Photo credit: Gadgets Now
Apple has confirmed that iPhone 13 and iPhone 13 Pro do not cancel noise during phone calls, including iPhone 13 mini and iPhone 13 Pro Max. Apple included the feature in the iPhone 12 series and earlier models to improve call quality in noise environment.
No reason was given to remove this feature from the iPhone 13 series noise cancellation during phone calls. By reference, by iPhone 13 series, we mean iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max. On previous iPhones, the feature was available in Settings under Audio/Visual, which is found in Accessibility.
According to Apple, the setting reduces ambient noise when making calls, but only when you hold the iPhone to your ear. By default, Apple has the feature enabled, although it's hidden in Accessibility.Theoretically, the feature made it easier for people to be heard when making calls from busy areas, such as in the near heavy traffic.
Apple has now confirmed to 9to5Mac that the lack of noise cancellation on the iPhone 13 series is not a bug in iOS 15. Instead, Apple ruled out the feature but didn't explain why. However, older iPhone models still support "phone noise cancellation" in iOS 15. Currently, the only workaround is to enable the voice isolation feature in Control Center, although this doesn't work with all apps.
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There Are So Many Details From Marvel’s ‘Eternals’ You Probably Missed
Photo credit: Marvel Studios
Marvel's Eternals is a very different beast to many other MCU movies; directed by autheor Chloe Zhao, is a slow-paced, meditative story that explores the emotional toll of immortality on a group of extraterrestrials who have lived on the fringes of human society for millennia. This departure from the familiar house style has led many fans to dislike Eternals, but there's one thing it does as well as other Marvel films: hide Easter eggs in plain sight. And now that the film is streaming on Disney+, a new video on the Heavy Spoilers channel just picked up all the niche references and clues.
The first Easter egg appears seconds into the film: The "six singularities" mentioned in the opening text are a nod to the Infinity Stones, those brightly colored McGuffins who have directed the action for much of the past decade. Following the introductory exhibition montage, as we move to Sersi in present-day London, we see an announcement from the Global Repatriation Council, the organization set up to deal with the aftermath of the Avengers undoing the Snap featured in The Falcon and the Winter Soldier.
A number of different versions of Captain America's shield also show up in the movie, first in Kingo's Bollywood number, and then later on his private plane, where the earliest design is on display. But it's not just Marvel properties that the movie is alluding to: Eternals includes a couple of nods to DC, with Phastos' son calling Ikaris "Superman," and Kingo's valet Karun being compared to Batman's butler Alfred.
The Celestial whose "emergence" functions as the movie's climactic crisis is named Tiamut, which is a reference to an apocalyptic figure from Babylonian mythology. This is especially apt given that ancient Babylon is one of the historical locations where we see the Eternals influencing humanity in the movie.
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Oppo’s next flagship leaks with OnePlus-esque Hasselblad branding
Image Credit: Onleaks
Details about Oppo's next flagship are starting to gather. Multiple leaks suggest it will be called the Find X5 Pro, with a similar design to last year's Find X3 Pro and specs broadly in line with the new OnePlus 10 Pro, now available in China. (OnePlus is now, of course, treated as an Oppo sub-brand.
The Find X3 Pro wasn't sold in the US, but it made its way to Europe and was one of the best phones of 2021. Renderings recently released by OnLeaks show a device with a camera hump that flows into the rest of the rear much like the Find X3 Pro, although the camera setup has changed and doesn't appear to include the previous phone's unique ring light accoutrement, which features a 'microscope' camera.
Alleged real photos confirming the OnLeaks renders have also now surfaced online, showing a white Hasselblad branded model of the phone, just like recent OnePlus flagships. There's also a photo of the device's settings menu, stating that it has a Qualcomm Snapdragon 8 Gen 1, like the OnePlus 10 Pro, as well as Oppo's own new chip, the MariSilicon X. This is an NPU used for image processing . It was announced alongside Oppo's Air Glass AR device late last year.
There are other specs floating around on Chinese social media channels that can't be verified but don't sound very surprising, like the OnePlus 10 Pro. Both of Oppo's previous Find X flagships were announced in March, for which we should get official details pretty soon.
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A massive volcanic eruption and tsunami hit Tonga and the Pacific. Here's what we know
Satellite images from JMA show the volcano eruption in Tonga on January 15.
An undersea volcano near Tonga has erupted for the third time in four days, potentially threatening the ability of surveillance flights to assess damage to the Pacific island nation following Saturday's massive eruption and tsunami.
The Australian Meteorological Service said a "major eruption" occurred on the Hunga Tonga Hunga Ha'apai volcano on Monday, but no tsunami warning was issued. Saturday's eruption was probably the largest recorded on the planet in more than 30 years, experts said.
Dramatic footage from space captured the eruption in real time, when a huge plume of ash, gas and steam was spewed up to 20 kilometers (12.4 miles) into the atmosphere and Tsunami waves were sent to crash into the Pacific.
Footage on social media showed people fleeing as waves flooded Tonga's capital, Nuku'alofa, and the afternoon sky turned black from the heavy ash cloud.
Tsunami waves have also been recorded thousands of miles away along the west coast of the United States, in Peru, New Zealand and Japan. In Peru, at least two people have died after being hit by high waves.
No mass casualties have yet been reported, but aid organizations are concerned about air contamination and access to clean water for residents of Tonga's outer islands.
With communications down, Australia and New Zealand sent flights to survey the damage.
Where is Tonga's Hunga-Tonga-Hunga-Ha'apai volcano?
Tonga is a Polynesian country of over 170 islands in the South Pacific and is home to around 100,000 people. It is a remote archipelago that lies about 800 kilometers (500 miles) east of Fiji and 2,380 kilometers (1,500 miles) from New Zealand.
The HungaTongaHungaHa'apai volcano, about 30 kilometers (20 miles) southeast of Tonga's Fonuafo'ou Island, lies underwater between two small islands about 2,000 meters (6,500 feet) high from the sea floor, with about 100 meters (328 feet) visible above sea level.
Researchers said it has erupted steadily over the past few decades.
In 2009 an eruption sent plumes of steam and ash into the air and formed new land above the water, and an eruption in January 2015 created a new island about 2 kilometers wide , effectively merging with the islands of HungaTonga and HungaHa'apai.
The most recent eruption began in December 2021, with plumes of gas, steam and ash rising about 12 kilometers (7.5 miles) into the air.
The volcano erupted again on January 14, and a massive eruption on January 15 sent shock waves around the world and triggered tsunami waves in the Pacific.
Where did the tsunami hit?
The eruption caused a tsunami on Tonga's largest island, Tongatapu, with waves recorded at 1.2 meters (about 4 feet) near Nuku'alofa city flowing onto coastal roads and flooding properties on Saturday.
Tsunami warnings went into effect across Pacific Island nations including Fiji, Samoa and Vanuatu. Footage from the ground in Fiji shows people fleeing to higher ground in the capital, Suva, as large waves hit the coast.
Tsunami warnings and advisories were also issued from parts of New Zealand, Japan and Peru, to the United States and Canada's British Columbia.
In Japan, the northeastern prefecture of Iwate saw waves as high as 2.7 meters (9 feet) and multiple smaller tsunamis were reported in numerous other locations, according to public broadcaster NHK. By Sunday afternoon, all tsunami advisories had been lifted in Japan.
The eruption also sent waves to the US West Coast, with some exceeding 3 and 4 feet in height, according to the National Weather Service office in San Diego. Tsunami waves were felt in California, Alaska and Hawaii.
What is happening with the ash cloud?
A giant cloud of volcanic ash blanketed Tonga over the weekend, obscuring the afternoon sky and blanketing Nuku'alofa in a thick foam of volcanic dust on Saturday.
Save the Children said drinking water supplies could be contaminated with ash and smoke and the immediate concern in Tonga is air and water safety. The ash cloud was moving west and was visible over Fiji, Vanuatu and New Caledonia on Sunday.
According to the state weather service, it reached Queensland in Australia on Monday. at dawn sunlight was scattered by #volcanic ash from the #Tonga eruption," the Queensland Bureau of Meteorology said on Twitter.
The ash prevented an Australian reconnaissance flight from departing to assess the damage early on January 17, although the flight took off later that morning.Several flights from Australia, New Zealand and Fiji to Tonga were postponed due to the ash cloud. suggest the volcanic ice eruption was the largest since the 1991 explosion at Mount Pinatubo in the Philippines, New Zealand volcanologist Shane Cronin told Radio New Zealand.
"This is a better observed eruption from space," Cronin said, according to Reuters. The eruption suggests it was likely the largest since the Pinatubo eruption in 1991," Cronin said.
What is the scale of devastation?
So far there have been no reports of mass casualties in Tonga and the extent of the damage is unknown as communications, particularly on the offshore islands, have yet to be restored.
Tonga "needs immediate help to provide its citizens with clean water and food". said the Speaker of the country's House of Representatives, Lord Fakafanua, in a statement released on social media.
It said "many areas" had been affected by "significant volcanic ash fall" but "the full extent of the damage to life and property is unknown at this time". Prime Minister Jacinda Ardern said January 16 that tsunami waves had had a "significant impact" on Nuku'alofa as boats and large rocks washed ashore.
"Shops along the coast have been damaged and major cleanup will be required," he said. The main underwater communications cable is also affected, likely due to a power outage. Australia's Minister for Pacific and International Development Zed Seselja said there was "significant damage" in Tonga, including to roads and homes.
He said there was still "very limited, if any" information from the outer islands. The International Federation of Red Cross and Red Crescent Societies said its teams are on the ground and have enough supplies in the country to feed 1,200 homes.
"Based on what little current information we have, the extent of the devastation could be immense, particularly for the outer islands," Katie Greenwood, head of the IFRC's Pacific delegation, said, according to Reuters.
The New Zealand Defense Force sent an Orion aircraft on a surveillance mission to Tonga to assess the damage. Ardern said the country initially provided $340,000 for relief supplies, technical assistance and on-site assistance.
Australia said it was preparing for additional support, with a plane loaded with humanitarian supplies including water and hygiene items ready to deliver to Tonga as soon as conditions allow.
China and the autonomous island of Taiwan said in separate statements that they are ready to provide assistance at Tonga's request.
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