Chinese video-game deal is fight for extra life

iDreamSky Technology Holdings

26/03/2020 03:11

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Alec Macfarlane
    HONG KONG, March 26 (Reuters Breakingviews) - Tencent-backed
iDreamSky wants to take over larger rival Leyou for $1.3 bln
with CVC’s help. The suitor’s Nasdaq delisting and subsequent
relisting in Hong Kong have not gone well, but owning the
Warframe developer makes strategic sense. The financial logic is
less compelling.   
    Full view will be published shortly.
    On Twitter https://twitter.com/AlecMac11
    
    CONTEXT NEWS
    - Video-game developer Leyou Technologies, which is in
discussions to sell itself, said on March 25 that it swung to a
net loss of $8.4 million for 2019 from a profit the year before,
as sales of its flagship space-combat game Warframe declined
because of increasing competition. 
    - Leyou said on Nov. 29 that Charles Yuk, its controlling
shareholder, had entered a memorandum of understanding with Hong
Kong-listed rival iDreamSky Technology in relation to a proposed
sale of a 69.2% stake in the company. An initial 21-day
exclusivity period was recently extended to April 15. 
    - Private equity firm CVC is backing the bid, Reuters
reported on March 19, citing unnamed sources. The group plans to
make a binding offer of HK$3.30 a share, the report added. 
    - Leyou shares closed at HK$2.27 on March 25. 
    - For previous columns by the author, Reuters customers can
click on  MAC/ 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CVC backs $1.3 billion bid for Chinese games developer Leyou:
sources     urn:newsml:reuters.com:*:nL4N2BC3ZF
Results announcement    http://asia.blob.euroland.com/press-releases-attachments/1203571/HKEX-EPS_20200325_9203152-0.PDF
BREAKINGVIEWS - Gaming’s strongest opponent will be regulation  
  urn:newsml:reuters.com:*:nL4N28K1GO
BREAKINGVIEWS - Chinese video-games takeover bid may start a
trend     urn:newsml:reuters.com:*:nL3N2610CU
BREAKINGVIEWS - Tencent e-sports stars would play better as a
team     urn:newsml:reuters.com:*:nL4N25I0FG
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jeffrey Goldfarb and Sharon Lam)
 ((alec.macfarlane@thomsonreuters.com; Reuters Messaging:
alec.macfarlane.thomsonreuters.com@reuters.net))