In the key news for UK stocks, Sweden-based PE firm EQT Group is inching closer to finalizing a deal to acquire Keyword Studios PLC (GB:KWS) for £2.2 billion. Currently, EQT is reviewing an offer of £25.5 per share, which is 73% higher than Keywords’ closing price on Friday. This marks the fifth offer from EQT, following the rejection of the previous four offers by the company.
Keyword Studios is a service company catering to the global video game industry. The services include game development, marketing, community management, and more.
EQT’s Offer for Keywords
According to the companies, the discussions are currently in an advanced stage, and Keywords is inclined towards accepting the offer.
Keywords also noted that the latest offer is substantially higher than EQT’s initial proposal, and the company will consider recommending the offer to its shareholders. Additionally, Keywords expressed confidence in its growth strategies, including expansion through acquisitions, and noted that EQT is supportive of its strategic direction.
As per the UK’s takeover regulations, EQT has until June 15 to either submit a formal offer or withdraw from the negotiations.
What is the Share Price Forecast for Keywords Studios?
Keywords share price has gained approximately 25% in the past month, marking a slight recovery from the previous sluggish period. Over the last few years, the share price has plummeted amid concerns surrounding the competitive challenge posed to its services by artificial intelligence.
Nonetheless, analysts remain bullish on the stock. Earlier this month, Deutsche Bank confirmed its Buy rating on the stock, predicting an upside of 68%. The bank holds an optimistic outlook on the company, citing its dominant market position, successful acquisition strategy, and cash generation. Despite the current uncertainty in the video game industry, Deutsche Bank believes that there is a solid opportunity for the company to shine with its resilient performance.
According to TipRanks’ consensus, KWS stock has a Strong Buy rating based on all Buy recommendations from five analysts. The Keywords Studios share price target is 2,005.0p, which is around 36% above the current trading level.
