Tencent Offers Funcom $148 Million Cash Buyout

Board unaminously recommends shareholders to accept deal.

CapitalWatch Staff
    Jan 22, 2020 2:30 PM  PT
Tencent Offers Funcom $148 Million Cash Buyout
author: CapitalWatch Staff   

Tencent Holdings Ltd. (OTCBB: TCEHY; HKEX: 0700) offered an all-cash buyout of Funcom NV, the Dutch mother company of Funcom Oslo AS, a Norwegian video game developer best known for multiplayer online role-playing game titles Age of Conan, Anarchy Online and The Secret World.

The Chinese giant offered 1.33 billion kroner ($148 million) for the company. At 17 kroner per share, the offer represents a valuation of Funcom of more than 27% higher than Funcom's Tuesday closing stock price, a significant premium. 

Tencent has had its eye on Funcom since last year when it bought up 29% of Funcom, cementing it as the company's largest shareholder. 

This is the latest investment by Tencent's globally-minded team, whose foreign investments include stakes in U.S. automaker Tesla, Finland's Supercell Oy, and France's Ubisoft. Acquisition is central to Tencent's strategy, boasting a controlling interest in companies like Riot Games, Epic, Ubisoft, Paradox, Frontier and Minic.

In a statement released Wednesday, Funcom's Board unanimously recommended the offer to shareholders also saying that there were no planned changes to company management should the deal go through. 

"Tencent will provide Funcom with operational leverage and insights from its vast knowledge as the leading company in the game space," Funcom Chief Executive Officer Rui Casais said in the statement. "We will continue to develop great games that people all over the world will play, and believe that the support of Tencent will take Funcom to the next level."   

Funcom's shares rose to 16.94 per kroner on over 19 million shares; average daily trading volume hovers around 500,000.

The offer will be valid for five weeks from about Feb. 5, Funcom said.