© Reuters. Adobe (ADBE) rises on mutually terminates Figma merger
(Up to date – December 18, 2023 9:06 AM EST)
Adobe (NASDAQ:) and Figma have collectively determined to terminate their proposed merger, in line with a press launch.
The deal was initially introduced on September 15, 2022. Adobe supposed to amass Figma with a mixture of money and inventory, and the deal won’t proceed, two corporations mentioned.
Adobe shares rose 2% on the information.
The mutual settlement to terminate the deal suggests a strategic reevaluation or adjustments in circumstances that led each events to reassess the viability or desirability of the merger. The merger didn’t obtain essential regulatory approvals from the European Fee and the UK Competitors and Markets Authority.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” mentioned Shantanu Narayen, chair and CEO, Adobe.
“While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences.”
Evercore ISI analysts reiterated an Outperform score and a $700 per share value goal on ADBE inventory.
“Our view on the deal was that a resolution one way or the other would be a net positive for the stock – essentially, this now frees up a significant amount of cash to potentially allocate towards buybacks, which when coupled with the lack of dilution from the deal, could lead to some upside to current EPS estimates,” analysts mentioned.
“While it remains to be seen how Adobe will redeploy the cash earmarked for the deal, if roughly ½ the purchase price can now be reapplied to buybacks, that would represent a 2-3% boost to our CY25 EPS target of $20.12.”
