Warren Buffett on Saturday said Berkshire Hathaway has been increasing its stake in Activision Blizzard in a merger arbitrage play, betting that Microsoft’s proposed acquisition of the video game company will close.
Berkshire now owns about 9.5% of Activision shares, Buffett said at the company’s annual shareholder meeting.
“Occasionally I’ll see an arbitrage deal and do it,” Berkshire’s chairman and CEO said. “Occasionally it looks like the odds are in our favor, but absolutely we can lose money on that company, fairly large sums of money, depending on what happened if the deal blows up.”
Buffett made it clear that he didn't have any prior or special knowledge:
We don’t know what the Justice Department will do, we don’t know what the EU will do, we don’t know what 30 other jurisdictions will do. One thing we do know is that Microsoft has the money,” he said.
Thought this might be interesting news for people who are playing the Activision arbitrage game. Does this inspire greater confidence that the deal will go through?
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