European video gamers rise in wake of sector's biggest-ever deal

Paradox Interactive AB (publ)

11/01/2022 09:42

** Shares in European gaming stocks are up after Take-Two
Interactive  TTWO.O  said on Monday it would buy "FarmVille"
maker Zynga  ZNGA.O  for $11 billion, the sector's largest ever
deal  urn:newsml:reuters.com:*:nL4N2TQ2A8
    ** Analysts flag a possible bidding war during the 45-day
go-shop period, and possible M&A activity elsewhere
    ** Amsterdam-listed tech investor Prosus  PRX.AS  - which
owns a stake in China's Tencent  0700.HK  - is up 4%, while
France's Focus Home Interactive  ALFOC.PA  and Ubisoft
 UBIP.PA , the maker of "Assassin's Creed", rise 3% 
    ** Despite ratios well below those reflected in the Zynga
deal, Midcap Partners says Ubisoft's strategic value is at least
equivalent, nodding to the firm's production capacity and
"extraordinary brand and games portfolio"
    ** Meanwhile Poland's CD Projekt  CDR.WA , British Frontier
Developments  FDEV.L  and Sweden's Embracer  EMBRACb.ST  rise
1-2%
    ** Jefferies says it wouldn't be surprised if a bidding war
emerged out of Zynga's 45-day go-shop period, while Cowen & Co.
puts the chance of a higher bidder coming in at around 20%
    ** Cowen names Electronic Arts  EA.O  as the most obvious
candidate and doesn't discount Tencent, Applovin  APP.O , Amazon
 AMZN.O  or Netflix  NFLX.O , but says Activision Blizzard
 ATVI.O  seems unlikely due to internal issues and focus on
mobile gaming

 (Reporting by Sarah Morland)
 ((sarah.morland@tr.com
mailto:sarah.morland@thomsonreuters.com))