Maybe the recent weight of court cases got to the Federal Trade Commission. Maybe it felt it had enough to do already with other mergers. But regardless of what drove it, the FTC is pumping the brakes on its pursuit of the Microsoft (NASDAQ:MSFT) takeover of Activision-Blizzard (NASDAQ:ATVI). Shareholders were nonplussed by this, as Microsoft was down fractionally in Friday afternoon trading.
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A case against the acquisition was poised to go before one of the FTC’s own judges, but the secretary of the FTC, April Tabor, shut the process down ahead of trial. The relevant order declares that the matter was “…in its entirety be and it hereby is withdrawn from adjudication…” This came after two separate court cases were brought into play and ultimately decided for Microsoft’s merger. One case in San Francisco denied the FTC a preliminary injunction outright, and then, the 9th Circuit Court of Appeals denied a request from the FTC to halt the deal during an appeal process.
This comes at likely a frustrating time for Microsoft. It only recently announced an extension of the original deal that sees it go out to October 18th. Microsoft did likely need the extra time; it’s still in negotiations with the U.K.’s Competition and Markets Authority. There are signs that that process will likely go smoothly, however; Phil Spencer, head of Xbox at Microsoft, noted his own “optimism” that things will go off reasonably well. With the FTC pulling out and having lost previously, mollifying the CMA might well go well after all.
Regardless of what happens there, Microsoft is still a big winner with analysts. With 31 Buy ratings, three Holds, and one Sell, Microsoft stock is considered a Strong Buy by analysts. Further, with an average price target of $374.59, Microsoft stock gives investors an 8.36% upside potential.
