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The analysts told investors in a note that there have been enough unusual antics over the past 6 weeks that suggest to them there is a chance the deal goes through despite the U.K. CMA blocking it.
“The denial by the CMA and the approval by EU regulators has created what appears to us a lot of political pressure,” wrote the analysts. “Additionally, Microsoft seems as aggressive as possible to get this deal done—that it might be possible for something as incredible as the first CMA capitulation to occur again.”
“Secondarily—because MSFT is aggressive in getting this deal done, we wonder if/when they re-negotiate to extend the deal with Activision (they have to if they plan to see through the appeals process), the merger agreement is changed to include a U.K. carve out—we believe ATVI-related revenue sold via Xbox in the U.K. is immaterial,” they added.
As a result, Jefferies still put the deal “as a low probability, but it has to be higher than zero.”
