Ubisoft a 'Natural and Motivated Acquirer' for THQ, says Analyst

Yesterday THQ posted better than expected results for its second fiscal quarter, narrowing its total loss to $5.6 million, proving itself to be a more efficient company following its major restructuring efforts. Investors cheered the performance, sending the stock up 14% in after hours trading. As of this writing, the stock is up 11 cents today.

With a better cost structure in place and some great franchises like UFC and Saint's Row (and the potentially promising Darksiders coming early 2010), Janco Partners analyst Mike Hickey believes that THQ is a fairly attractive acquisition target. In particular, he thinks that French publisher Ubisoft would be the best fit.

"We expect the company could be acquired; in consideration of their significantly diminished enterprise value, meaningfully reduced cost structure, compelling IP portfolio including Saint’s Row, dominance in the fighting category, strong internal development talent (including MMO development experience), and a massive NOL base of $330 million.  We believe Ubisoft would be the most natural and motivated near term acquirer and we expect an acquisition would come at a meaningful premium to the current share price," he said.

Both UFC and Saint's Row would be great additions to Ubisoft's already strong portfolio, although we're not so sure Ubisoft is looking to make a major acquisition right now in this turbulent economic environment.