The latest Wedbush Morgan mailout has revealed raised estimates for the combined business’ income FY ’09 revenue to $3.70 billion – up significantly from $2.41 billion.

On July 8th, shareholders are expected to approve the deal, with Wedbush Morgan predicting that the merger will be officially closed by July 11th.

The research note adds: "It is important to note that our estimates contain little margin expansion, and only modest growth for the core publishing business and for World of Warcraft subscribers.”

“We expect core publishing to grow from pro forma $2.8 billion in calendar 2007 to around $3.7 billion in calendar 2009, or about 15 per cent CAGR. We expect combined Starcraft and WoW subscribers to end 2009 at 13 million, up less than 30 per cent over 2007."

“Gross margins are up only 300 bps from the pro forma level for 2008, with greater contribution from a full year of WoW subscription revenues.”

“We are raising our rating to 'strong buy' from 'buy' and raising our price target to $45 from $35, based on 30x our calendar 2009 EPS estimate of $1.50. This is at the upper end of Activision's historical multiple range.”