Jefferies analyst Andrew Uerkwitz notes that the U.K. Competition and Markets Authority blocked the acquisition of Activision Blizzard (ATVI) by Microsoft (MSFT) and although Microsoft has already announced it will appeal, the firm expects investors will "dust off their ATVI model and start valuing the company on fundamental value." The firm, which notes that an EU decision is due later in the month and the FTC lawsuit picks up in August, believes a possible re-negotiation is "likely" and says that a deal extension is needed. However, it adds that the "broader video game space will lose any M&A premiums as this is now likely off the table." The firm, which believes investors will see Activision intrinsic value near $80, with upside pending upcoming launches, has a Buy rating and $95 price target on the shares.
Published first on TheFly
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