By David Shepardson
WASHINGTON (Reuters) -Time is running out on a deadline for Microsoft (NASDAQ:MSFT) to complete its $69 billion acquisition of Activision Blizzard (NASDAQ:ATVI), compelling the companies to ask a U.S. judge on Wednesday to quickly get the ball rolling on the Federal Trade Commission's legal bid to block the deal.
U.S. District Judge Edward Davila on Tuesday had set a June 22-23 evidentiary hearing in San Francisco and temporarily blocked the companies from completing the deal pending a decision by another judge on the same court on whether to grant a preliminary injunction.
The hearing will focus on whether to put the deal on hold while an administrative judge considers the case. But the companies said if a temporary hold is granted they would have to drop the deal altogether because the "glacial" pace of the FTC review would make waiting impractical.
"Time is of the essence," the companies wrote in a court filing, noting that the agreement has a termination date of July 18 and contains a $3 billion termination fee that Microsoft would have to pay.
"Let there be no doubt, a preliminary injunction ruling is the only decision that matters under these challenging deadlines."
The FTC declined to comment.
The companies asked the court to schedule a minimum of five days for an evidentiary hearing beginning on June 22 and running through the week of June 26. They also asked for a case management conference to be set for Thursday but emphasized they were not seeking to delay a resolution by asking for a longer evidentiary hearing.
If the court grants the FTC preliminary injunction "it will effectively block the transaction because the FTC's process is 'glacial' and one no substantial business transaction could ever survive," Microsoft and Activision wrote citing a 1986 case.
The hearing in the FTC administrative proceeding is set to begin Aug. 2.
The FTC has argued the transaction would give Microsoft's video game console Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony (NYSE:SONY) Group Corp's PlayStation out in the cold.
Microsoft's bid to acquire the "Call of Duty" video game maker was approved by the EU in May, but British competition authorities blocked the takeover in April.