US probes Barry Diller and David Geffen over Activision trades before $75bn merger

U.S. media mogul Barry Diller and music mogul David Geffen are being investigated for potential internal trading related to the acquisition of Activision Blizzard options days before the video game maker was acquired by Microsoft, said people who briefed on the matter.

The U.S. Department of Justice and the Securities and Exchange Commission (SEC) are each examining whether Diller and Geffen used non-public information to profit from Microsoft’s $ 75 billion takeover of Activision. Alexander von Furstenberg, the son of Diller’s wife and esteemed fashion designer Diane von Furstenberg, was also questioned.

In a deal made by JPMorgan, the three bought Activision options for $ 40 a share on Jan. 14. Activision shares closed at $ 65 that day. Four days later Microsoft has acquired Activision In a cash transaction to evaluate the company behind it Sense of mission and World of Warcraft Priced at $ 95 a share.

The three have not yet sold their options, the correspondent said on the subject, but are currently on paper profits worth about $ 60 million. They acquired Activision options worth about $ 108 million, which is now worth about $ 168 million. The acquisition of Activision by Microsoft has not yet closed, but if completed the three could yield more than $ 100 million.

JPMorgan reported trade to U.S. authorities after the deal was announced, as the US Bank is obligated to disclose any deal in which it has evidence or is concerned about activities that may be illegal as part of a criminal settlement reached in 2020 related to market manipulation. Briefed on the matter.JP Morgan declined to comment.

“None of us had any knowledge of any person or source or anything about a possible acquisition of Activision by Microsoft,” Diller told the Financial Times.

“We acted simply in the belief that Activision was not valued and therefore has the potential to be private or acquired. And if we had such information, we would never trade it. It strains the credibility to believe we would have done so three days before Microsoft and Activision announced it.” , He added.

The Department of Justice declined to comment on the investigation and the SEC did not immediately respond to a request for comment.

Diller, who leads IAC, which has supported a variety of online media brands, including Tinder and Expedia, is a member of Activision CEO Bobby Kotik.

Diller added that “because of the timing, we immediately told our lawyers to keep everything because we were sure someone would say, ‘Well, how could that be such a coincidence?’ Turns out, that’s all it is. “

Diller and Geffen were close friends for decades after they both dropped out of the University of California, Los Angeles to pursue a Hollywood career in the 1960s, starting as low-level employees at the talent agency William Morris.

Diller became one of the most successful film and television producers in Hollywood and Geffen became a music mogul, but both built the bulk of their billions of dollars as investors.

Diller led Paramount Pictures in the 1970s and 1980s, producing blockbuster films including grease and The Pirates of the Lost ArkBefore founding Fox Broadcasting for Rupert Murdoch’s news company. Diller left Hollywood in the early 1990s to gamble online, creating IAC / InterActive, which created many public companies including Expedia, Ticketmaster and Match Group.

Geffen was one of the most successful music producers from the 1970s to the 1990s, working with artists such as Jackson Brown and releasing records by Bob Dylan, Johnny Mitchell and Guns N ‘Roses. Geffen, on the other hand, made billions as an investor, betting on companies like Apple and hedge funds.

Investigations were first reported by the Wall Street Journal.

US probes Barry Diller and David Geffen over Activision trades before $75bn merger Source link US probes Barry Diller and David Geffen over Activision trades before $75bn merger

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