Activision downgraded at three brokers as Microsoft deal nears completion
Activision (NASDAQ:ATVI) was cut at three Wall Street firms as analysts see its $69 billion sale to Microsoft (NASDAQ:MSFT) nearing completion, though it may not happen on Tuesday, according to media reports. Activision(ATVI) ticked down 0.8%.
Activision (ATVI) was downgraded to neutral at Baird and Atlantic Equities and equalweight at Wells Fargo as the videogame maker's share price nears the $95 share takeover price from Microsoft (MSFT).
"While we still expect the deal to close (in the coming days/weeks), we no longer see a favorable risk-reward," Wells Fargo analyst Brian Fitzgerald wrote in a note on Monday.
The two companies aren't likely to close by the Tuesday deadline, but they don't intend to walk away from each other and are instead working on an extension to the termination deadline, according to media reports.
"There is a possibility that the stock's upside increases if the offer price is raised upon extension of the deal deadline, but the deal seems highly likely to complete, so a short extension with no change to the key terms seems more likely and underpins our Neutral recommendation," Atlantic analyst Kunaal Malde wrote in a note on Tuesday.
After a Monday conference by the UK's Competition Appeal Tribunal resulted in a conditional pause to the appeals process, attention turns to how Microsoft can modify its deal to assuage the UK's Competition and Markets Authority enough to lift its veto.
The UK is the only major jurisdiction standing between Microsoft (NASDAQ:MSFT) and Activision Blizzard (ATVI).
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