After a long-awaited period of uncertainty, Microsoft was finally able to pop the champagne this week when a US federal judge rejected the FTC’s challenge against the company’s planned $70bn acquisition of Activision Blizzard, clearing the way for the deal to close as soon as next week. This is the latest L for Lina Khan’s FTC and its efforts to crack down on big tech, having previously sued Meta and Amazon – and lost both.

Martin Peers writes in The Information that the FTC didn’t present much evidence as to why the deal was being blocked – Microsoft is a distant third in the gaming market (behind Sony and Nintendo) and the core issue with similar acquisitions is “whether they make sense from a business point of view, but that’s something for shareholders to address over time.” Alyssa Finley, a member of the Wall Street Journal’s editorial board, says that more companies will start to raise “constitutional arguments challenging the FTC’s authority,” potentially putting up even more roadblocks in the FTC’s pursuit to curb what they see as anti-competitive deals. The FTC could still appeal the decision, but law firm Davis Polk suggests that the agency will continue to see pushback from federal courts if it continues to take a hardline stance in revised merger guidelines or future enforcements.

A few blocks down the road, it was the proposed PGA and LIV tie-up taking center stage on the Senate floor. Members of the Homeland Security and Governmental Affairs Subcommittee teed off on the PGA’s chief operating officer Ron Price and board director Jimmy Dunne, both of whom defended the tentative agreement claiming that PGA would remain intact and become more powerful as a result. Republican subcommittee member Senator Ron Johnson took a gentler approach than his colleague Senator Richard Blumenthal, telling CNBC that the PGA acted to “preserve the game of golf” and that “the reality is we all buy oil. We drive cars. We are the ones filling up the coffers of the [Public] Investment Fund. I would rather have the Saudis invest their oil wealth in the U.S., rather than China or Russia, that’s just a reality of the world.”

The big media conference in Sun Valley, typically known as a noisy week for media dealmakers, made waves this week for a different reason – Bob Iger’s contract as The Walt Disney Company CEO was extended by its Board for another two years and Iger gave a news-generating interview with CNBC Anchor David Faber. Among the backdrop of the Idaho mountains yesterday morning, the two discussed the challenges Disney is facing – including most prominently what Iger explicitly said were “disruptive forces” affecting the company’s linear businesses – and how Iger plans to continue transforming Disney's business for long-term growth.

Lastly, Carl Icahn’s struggle against IEP reentered the news cycle when the doomed octogenarian activist was left no other choice to save face than to separate his personal loans from those of IEP, as Cara Lombardo reported. Hoping to limit the fallout from the short-seller saga, Icahn had to increase his collateral and must repay the loans in three years’ time. Only time will tell if this was a reputation-saving move.

Have a great weekend,

GPP Team

The New York Times: Judge Rejects F.T.C. Delay of $70 Billion Microsoft-Activision Deal

Kellen Browning, David McCabe and Karen Weise break down California District Court Judge Jacqueline Scott Corley’s ruling against the FTC’s efforts to block the Microsoft-Activision transaction, clearing the way for the mega-merger and potential increased dealmaking activity. Read More

The Information: FTC’s Khan Should Pick Her Targets More Carefully

According to Martin Peers, the ruling against the FTC’s request to block Microsoft's acquisition of Activision has hurt Lina Khan’s credibility regarding future tech antitrust cases, as it came right after the FTC faced a similar outcome in their case against Meta. Read More

The Wall Street Journal Opinion: The FTC Loses Another Antitrust Court Case

The latest episode of WSJ’s Potomac Watch podcast discusses Lina Khan’s inability to stop Microsoft's acquisition of the video-game developer Activision Blizzard. Listen Here

CNBC: PGA Tour officials defend LIV Golf deal in Senate hearing 

Chelsey Cox and Lillian Rizzo of CNBC reported on the PGA Tour’s defense of its controversial deal with the Saudi-backed LIV Golf in a Senate hearing this week, citing the PGA Tour’s previous standoff with LIV posed an existential threat to professional golf. Critics of the agreement have called the deal “sportswashing.” Read More

CNBC: Disney CEO Bob Iger on Streaming Wars and Future of Media Business

The Walt Disney Company CEO Bob Iger joined CNBC’s David Faber from Sun Valley to discuss the future of Disney’s linear businesses, pathways for future growth of ESPN and the future of Hulu within Disney’s bundle, on the heels of the Board’s vote to extend Iger’s contract to the end of 2026. Watch Here

The Wall Street Journal: Carl Icahn Gets Breathing Room From Lenders Following Short-Seller Attack

Cara Lombardo writes that activist investor Carl Icahn reached a loan-repayment agreement with lenders in his investment company, IEP, giving the corporate agitator "breathing room" after IEP’s share price dropped nearly 40% in May after Hindenburg Research alleged the company of relying on “a Ponzi-like" structure. Read More

ACTIVISM

The Wall Street Journal: Cracking the Proxy Advisory Duopoly

Foreign-owned firms Glass Lewis and ISS make up 97% of the proxy advisory market. The two firms are under scrutiny by 21 states Attorneys General for their outsized influence, lack of transparency and conflicts of interest. The WSJ says the firms “impose onerous reporting burdens on public companies” while “avoiding accountability and disclosure themselves.” Read More

Bloomberg: Activist Fights Tick Up, Along With Settlements

The advent of universal proxy has helped proxy contests evolve from "public battles" to now "private and discreet" behind-the-scenes discussions and settlements, writes Crystal Tse. Read More

Harvard Law School Forum on Corporate Governance: Market Changes and the Emergence of New Players Are Impacting Activism

Skadden partners Demetrius Warrick, Richard J. Grossman, and Neil P. Stronski write that despite decreased M&A activity, the rate of shareholder activists demanding that companies pursue strategic transactions remains high and that advanced preparation is still the best way for companies to prepare and defend themselves against activist approaches. Read More

M&A & IPOs

Reuters: Exxon to Buy Denbury in $4.9 Billion Deal

Exxon is planning to acquire Plano, Texas-based company Denbury in an all-stock transaction that grants Exxon access to “the largest carbon dioxide pipeline in the United States.” Read More

Bloomberg: Birkenstock Owner Said to Weigh $6 Billion IPO

Crystal Tse shares that L Catterton, the French private equity firm that owns Birkenstock and is also backed by LVMH, is considering a potential $6bn public listing for the shoe and sandal brand. Watch Here

Financial Times: Nvidia in Talks to Be an Anchor Investor in Arm IPO

Tabby Kinder, Qianer Liu, Nicholas Megaw, Kana Inagaki and Tim Bradshaw report that Arm, a British chip manufacturer, is negotiating to bring Nvidia as their anchor investor for a potential NYSE IPO with a valuation ranging anywhere between $40bn-$80bn. Read More

The Information: Liquid Death Hires Goldman Sachs, Aiming for 2024 IPO

Cory Weinberg, Maria Heeter and Erin Woo report that the cheeky venture-backed canned water brand Liquid Death, revered throughout Silicon Valley, has hired Goldman Sachs to lead its potential IPO in early 2024. Read More

CORPORATE GOVERNANCE

S&C Publication: How the Recent Supreme Court Term Will Affect Business

Sullivan & Cromwell’s review of how recent Supreme Court decisions, including how the ruling regarding Affirmative Action in Higher Education, can potentially impact corporations. Read More

ESG

The Wall Street Journal CFO Journal: Global Sustainability Disclosure Rules Go Live. CFOs Watch for What’s Next.

CFOs are trying to balance national and international sustainability disclosure rules from the SEC, EU and the International Sustainability Standards Board, reports Jennifer Williams-Alvarez. These disparate rules raise concerns about cross-referencing standards, competitive disadvantages and inconsistent emissions reporting. Read More

Columbia Law School Blue Sky Blog: Shareholder Proposals and the Debate over Sustainability Disclosure

Jill E. Fisch and Adriana Z. Robertson explore how public controversies and evolving investor demands are shaping the conversation around the SEC’s sustainability disclosure rules. Some argue that the disclosures “exceed the scope of the SEC’s rulemaking authority,” while others, like the Sierra Club, allege they will sue if the SEC relaxes its sustainability disclosure stance. Read More

FROM OUR DESK TO YOURS

It’s been quite the year for activism, as evidenced by the high campaign activity indicated by Bloomberg’s latest Global Activism League Table rankings. On a personal note, we were gratified to be ranked as the #4 IR/PR advisor by total market cap of the companies we represented during the first half of the year. We congratulate our colleagues and advisory partners across the industry and we are humbled to be in their company, working in the trenches on these high-profile, high stakes situations.

PEOPLE MOVES

• Marco Caggiano of JP Morgan Chase & Co will become the vice chairman of M&A at Morgan Stanley. Read More

• Uber’s Chief Financial Officer, Nelson Chai, plans to leave the ride hailing company. Read More

• September 11-13: CII Fall 2023 Conference: Next Frontiers in Governance, Long Beach, California 

• September 28: Delivering Alpha Investor Summit, New York, New York