Microsoft shares close higher on Monday, company to acquire ZeniMax Media in $7.5 billion cash deal

Microsoft Corp (MSFT) announced on Monday plans to acquire ZeniMax Media in a cash deal valued at $7.5 billion. This is going to be the most formidable gaming acquisition Microsoft has ever made, as the software giant aims to bolster its video game catalogue in its fierce competition with Sony.

ZeniMax, which is the parent company of Bethesda Softworks, has created hit titles such as “Doom” and “Fallout.”

Microsoft shares closed higher for the fourth time in the past ten trading sessions on NASDAQ on Monday. The stock went up 1.07% ($2.15) to $202.54, after touching an intraday low at $196.43 and an intraday high at $202.58 respectively.

Shares of Microsoft Corporation have risen 28.43% so far in 2020 compared with a 1.56% gain for the benchmark index, S&P 500 (SPX).

In 2019, Microsoft’s stock went up 55.26%, thus, it again outperformed the S&P 500, which registered a 28.88% gain.

After the acquisition completes, Microsoft is expected to own 23 creative studio teams. The company also said it intended to include Bethesda’s future game titles into its monthly Xbox Game Pass subscription service. Currently, the Game Pass has over 15 million subscribers.

The software company said the deal was expected to be finalized during the second half of fiscal year 2021 and it would have a limited impact on adjusted operating income in fiscal years 2021 and 2022.

Microsoft and Sony are scheduled to launch their next-gen gaming consoles in November.

Analyst stock price forecast and recommendation

According to CNN Money, the 27 analysts, offering 12-month forecasts regarding Microsoft Corp’s stock price, have a median target of $233.00, with a high estimate of $260.00 and a low estimate of $208.00. The median estimate represents a 15.04% upside compared to the closing price of $202.54 on September 21st.

The same media also reported that at least 26 out of 31 surveyed investment analysts had rated Microsoft Corp’s stock as “Buy”, while 3 – as “Hold”.