TTWO - Take-Two Electronic Arts Roblox Ubisoft could be targets after Activision deal

2023-07-12 14:21:38 ET

A successful completion of Microsoft's ( MSFT ) $69 billion acquisition of Activision ( ATVI ) may lead to further consolidation in the videogame industry, according to a Benchmark analyst.

Take-Two Interactive ( NASDAQ: TTWO ), Electronic Arts ( NASDAQ: EA ), Roblox ( NYSE: RBLX ), and Ubisoft ( OTCPK:UBSFY ) could be potential takeover targets, Benchmark analyst Mike Hickey wrote in a note on Wednesday.

Potential buyers of the videogame makers include Amazon ( AMZN ), Tencent ( OTCPK:TCEHY ), Google ( GOOGL ), Netflix ( NFLX ), and Sony ( SONY ), according to Benchmark's Hickey.

The note comes after a U.S. federal judge on Tuesday denied the Federal Trade Commission's request for a preliminary injunction to block the Activision ( ATVI ) $95 per share deal, paving the way for a potential deal to close by the July 18 termination deadline.

Hickey downgraded Activision ( ATVI ) to hold from buy on Wednesday in the wake of the judge's ruling as the videogame maker's shares exceed Benchmark's $90 price target.

"We believe the decision is a major victory for MSFT and should provide a path for them to complete the proposed deal," Hickey wrote.  "We believe that MSFT’s successful acquisition of ATVI could provide a catalyst for further industry consolidation in the video game industry."

After Activision ( ATVI ) shares surged 10% on Tuesday in the wake of the FTC news and some positive developments in the UK, ATVI shares slipped 1% on Wednesday amid reports that the UK's antitrust authority may need to do a new probe of the Microsoft (NASDAQ: MSFT ) deal if the companies' restructure their deal to appease the regulator.

More on Activision/Microsoft and tech M&A

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• Activision Blizzard Surges To New 52-Week High On Deal Optimism
• Microsoft gets 'trophy moment' with Activision court win: Wedbush
• Activision downgraded at Raymond James as Microsoft deal likely to close soon
• Microsoft offers to make small divestiture to meet UK objections on Activision - CNBC
• Activision gains again, up 11% as UK looks to pause trial over Microsoft purchase

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