The Chinese firm offers to buy out the remaining shares in Sumo Group for 513p per share in cash
Tencent offers to takeover Sumo Group for 513p per share. (Credit: そらみみ/Wikipedia.org)
Tencent has reached an agreement to takeover Sumo Group, a UK-based publicly-listed video game holding company, for nearly £919m.
The Chinese tech conglomerate will execute the deal via its fully-owned subsidiary Sixjoy Hong Kong. It already holds a stake of 8.75% in Sumo Group.
As per the terms of the deal, Tencent offers to buy out the remaining shares in the company for 513p per share in cash.
Sumo Group is engaged in providing end-to-end creative development and co-development services to the video game and entertainment sectors. The company has 14 studios in five countries with a workforce of over 1,200.
Some of the company’s subsidiaries include Sumo Digital, Pipeworks Studios, and Atomhawk.
Tencent chief strategy officer and senior executive vice president James Mitchell said: “Tencent is pleased to have been an investor in Sumo since 2019, and we view the proposed combination as an evolution of our partnership. Tencent is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world.
“We hold Sumo’s team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years.”
Mitchell said that the Chinese conglomerate plans to provide its expertise and resources to expedite Sumo Group’s growth in the UK as well as overseas.
Sumo Group’s board has determined the terms of the transaction to be in the best interests of the company’s shareholders and intends to unanimously recommend them to vote in its favour.
Sumo Group CEO Carl Cavers said: “Tencent has a strong track record for backing management teams and their existing strategies.
“Alongside the acceleration of Own-IP work, Tencent has demonstrated its commitment to backing our client work and has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects.
“We love what we do and have some amazing relationships with the world’s best videogames publishers. Sumo will continue to work with these clients to break new ground and create even more fantastic games.”
The proposed deal is being backed by some of the company’s key stakeholders. These include the company’s directors with a combined stake of 8.1%, Perwyn Bidco (UK) II, which has a 16.7% stake, and Darren Mills, who holds a 1.9% stake.
The deal is subject to Sumo Group’s shareholders’ approval, court approval, antitrust clearances in the UK and the US and other conditions.
Earlier this month, Tencent secured approval from a Chinese competition regulator for its previously announced $3.5bn takeover of search engine Sogou.