The U.K.’s competition regulator has decided to extend its deadline for reviewing Microsoft’s monumental $69 billion acquisition of Activision Blizzard. This move indicates that Microsoft may be on the verge of overcoming the last obstacle standing in the way of the deal.
In a boost for the tech giant, UBS upgraded Microsoft’s stock from Neutral to Buy, citing promising AI catalysts in the near future. As a result, shares of Microsoft rose by over 2% before the market opened.
Although further details were not disclosed, it is plausible that the altered circumstances refer to a U.S. federal judge’s rejection of the Federal Trade Commission’s attempt to impede the deal earlier this week. While the FTC is appealing this decision, the U.K.’s CMA currently stands as the only major regulator preventing the completion of the acquisition.
The prolonged review period conflicts with Microsoft and Activision’s original July 18 deadline to finalize the deal, but it is likely that they will adjust it if negotiations continue to progress positively. The CMA has expressed its willingness to consider modifications to the agreement.
In premarket trading on Friday, Activision shares increased by 1.6% to $91.01, suggesting that shareholders are optimistic about the latest developments. Over the past week, these shares have gradually closed the gap towards the $95 per share acquisition price.
Meanwhile, Microsoft’s shares rose by 2.1% in premarket trading, reaching $348.61. Analysts at UBS raised their rating on the stock to Buy from Neutral and adjusted their target price to $400 from $345. They cited signs of stability in cloud infrastructure spending and the potential benefits Microsoft could derive from advancements in artificial intelligence in the short term.