The shares of mobile video game makers Zynga  (ZNGA - Get Report) and Glu Mobile  (GLUU - Get Report) are rising after the leading player in the space, King Digital  (KING) , agreed to be bought by console and PC game giant Activision Blizzard  (ATVI - Get Report) . Two research firms had different takes on the deal. Cowen said the acquisition is an "absolute steal" for Activision, while Jefferies wrote that the transaction has mixed implications for the buyer.

NEWS: A wholly owned subsidiary of Activision Blizzard has agreed to acquire all of the outstanding shares of King for $18.00 in cash per share, for a total equity value of $5.9B. Activision believes the King acquisition will be accretive to 2016 estimated non-GAAP revenues and earnings per share by approximately 30% and significantly accretive to 2016 estimated free cash flow per share. King will continue to be led by Chief Executive Officer Riccardo Zacconi, Chief Creative Officer Sebastian Knutsson, and Chief Operating Officer Stephane Kurgan, all of whom have entered into long-term employment contracts.

ANALYST TAKE: After acquiring King Digital, Activision has become "one of the top mobile gaming companies in the world," according to Cowen analyst Doug Creutz. King is one of the two best Western mobile game makers and will provide Activison with additional valuable intellectual property, Creutz contended. Moreover, King has a strong management team which will remain in charge there, and Activision expects the deal to be 30% accretive next year, excluding any synergies, the analyst wrote. Much less enthusiastic about the deal was Jefferies analyst Brian Pitz, King's bookings are declining, while most of its revenue is derived from a a single game, Candy Crush Saga, whose bookings have been fallen significantly, the analyst stated. Although King has since introduced other games, the company's revenue continues to fall, Pitz noted. On a positive note, Activsion "found a creative way" to use its offshore cash and has entered the fast growing mobile game space, Pitz stated. He kept a $33 price target and Buy rating on Activision.

WHAT'S NOTABLE: Zynga is slated to report its results after the close today and Glu Mobile is supposed to report its results on November 5.

PRICE ACTION: In early trading, Glu Mobile surged 6.25% to $3.91, Zynga rose 1.5% to $2.42, Activision rose 1.2% to $35 and King rallied 14% to $17.72.

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