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April 2, 2022

Microsoft (MSFT.O) may be getting more than it bargained for in its $69 billion deal to buy Activision Blizzard (ATVI.O). Shares of the “Call of Duty” game publisher are trading more than 15% below the software giant’s cash offer of $95 per share - a bigger gap than is typical for such deals. That suggests investors foresee possible trouble ahead.

Activision was already in hot water when Microsoft boss Satya Nadella came knocking in January. The company recently settled allegations of sexual harassment and discrimination with the U.S. Equal Employment Opportunity Commission.

But there's more to come. The Department of Justice and the Securities and Exchange Commission are investigating an Activision options trade made by media moguls David Geffen and Barry Diller days before Microsoft's acquisition was announced, according to the Wall Street Journal. And some U.S. senators want the merger investigated on anticompetitive grounds.

Microsoft's $2.3 trillion market value dwarfs the deal size. But it's bringing outsized scrutiny of a kind the Redmond, Washington giant has avoided in the past and may not relish now. (By Jennifer Saba)