Getty Images’ US$3.7 billion tie-up with Shutterstock Inc (NYSE:SSTK) has fetched backing from Wedbush analysts, despite uncertainties around how much the former will pay.
Wedbush reiterated an ‘outperform’ rating and US$7.70 share price target for Getty in a note following Tuesday’s news of the merger.
Analysts said the deal to create a single visual content company under the Getty name was likely to overcome regulatory hurdles and that the two would be a good fit.
“On the creative side, the new entity will compete with AdobeStock, text-to-image artificial intelligence tools and personal photography,” Wedbush noted.
“On the editorial side, the new entity will compete with the Associated Press and other in-house editorial photographers.
“The two companies are highly complementary, with each stock photo service serving a different niche in terms of customer size, geography, asset type, and platform type.”
However, Wedbush noted there was uncertainty around how much Getty would pay in cash or equity.
Shutterstock shareholders had been offered either cash, Getty shares, or a combination of the two, leaving questions over share count following the transaction, Wedbush said.
Timing was also uncertain, analysts added, alongside the scope for rival bids for Shutterstock, though these were seen as unlikely.
Getty shares receded 11% in pre-market trading to US$2.83, after surging by 24% on Tuesday. Shutterstock was down 4% in the meantime, after climbing almost 15%.