Investors received with enthusiasm the announcement of the takeover of Activision-Blizzard. Indeed, the stock prices of many video game players, not just Activision-Blizzard and Microsoft, have risen drastically.
As you know, Microsoft made a major announcement this Tuesday, January 18, 2022. A historic announcement. Indeed, the Redmond firm has confirmed the acquisition of a video game heavyweight: Activision-Blizzard. To acquire the Call of Duty editor or World of Warcraft, the American company spent no less than 60 billion euros. Besides, the takeover of the parent company of Bethesda for 7.5 billion dollars in September 2020 seems laughable.
Without surprise, this operation provoked reactions from the stock market. Thereby, Activision’s stock soared more than 37% on Wall Street at the time of the announcement. For the time being, Microsoft therefore proposes to buy back Activision securities in cash at the unit price of $95 per share, a premium of 45.2%. If the merger between the two companies is indeed concluded during the 2023 financial year, Microsoft will therefore become the third largest video game publisher in the world in terms of revenue, just behind the Chinese online games giant Tencent (owner of Riot Games in particular) and a certain Sony.
Also read: Microsoft takeover of Activision – which games could end up in Game Pass?
Ubisoft, the next ideal candidate for a takeover?
However, the announcement also had unexpected effects on the share price of other industry players. This is for example the case ofUbisoft, whose stock jumped from 11.87% to 50.44 euros. Same observation on the side of Electronic Arts, which despite the controversies surrounding Battlefield 2042, saw its share price increase by 4.55% to 136 dollars. CD Projekt, the fathers of The Witcher and Cyberpunk 2077, also took advantage of this announcement with a jump of 1.57%.
As you will have understood, some investors have already chosen to bet on the next big video game player that will be bought by a GAFAM. Ubisoft is clearly the favorite for the moment, as financial analyst Charles-Louis Planade explains in the columns of Les Échos: “Something crazy ! The big maneuvers continue… Is Ubisoft next on the list? On the multiple transactions reflected by the transaction (editor’s note: direct reference to the takeover of Activision Blizzard by Microsoft), Ubisoft would be valued at 15 billion euros or 121 euros per share”.
Source: The echoes
