‘Call of Duty’ video gaming developer, Activision Blizzard (NASDAQ: ATVI) has been permitted to intervene in Microsoft’s (MSFT) legal battle with UK’s anti-trust regulator, the Competition and Markets Authority’s (CMA) over its decision to block the deal.
Earlier this year, UK’s regulator blocked MSFT’s $69 billion takeover of Activision Blizzard raising its concerns over cloud gaming. The CMA noted that Microsoft currently holds between 60% and 70% of the cloud gaming market by itself.
The CMA’s decision had caused a furor in the tech industry and had raised questions over whether the UK still welcomed tech firms, especially since the European Union regulator had approved the takeover. However, the U.S. Federal Trade Commission has also blocked the deal and MSFT is appealing this decision.
Microsoft decided to appeal against CMA’s decision and with Activision being allowed to intervene, the company will be able to make its case to the tribunal.
Jeffries analyst Brent Thill, while reiterating a Buy rating on MSFT stock sees “a more than a zero chance an appeal and approval happen” when it comes to MSFT’s takeover of ATVI. However, the analyst added that if the deal is not closed, it is likely that ATVI would go for a stock buyback “somewhere in the $4B range.”
Overall, analysts are bullish about MSFT stock with a Strong Buy consensus rating based on 30 Buys, four Holds, and one Sell.