Hong Kong gaming firm Leyou Tech gets a new buyout offer
No final decision has been made and Leyou Tech could still decide against a transaction with Zhejiang Century Huatong Group Co.
Leyou Technologies Holdings Ltd. has received a new non-binding takeover offer from a Shenzhen-listed rival gaming firm, according to people familiar with the matter.
Zhejiang Century Huatong Group Co. and Leyou's controlling shareholder Charles Yuk are in talks after signing a memorandum of understanding, the people said. Century Huatong will likely kick off due diligence soon, said the people, who asked not to be identified as the information is private.
A bid by Century Huatong would set up a clash with iDreamSky Technology Holdings Ltd., which has been in talks with Leyou's Yuk and other selling holders since late last year. iDreamSky, which counts Tencent Holdings Ltd. among its investors, was in discussions with CVC Capital Partners for a joint offer but the Covid-19 pandemic has brought their talks to a stalemate, Bloomberg News reported last month.
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Leyou is still in conversation with iDreamSky and other suitors have expressed interest in recent weeks, the people said.
CVC and iDreamSky had proposed to jointly acquire Leyou for $1.23 billion, which was revised from an initial $1.4 billion offer, people familiar with the matter have said. Century Huatong's offer was slightly higher than its rival bidders, the people said this week.
Trading of shares in Leyou was suspended on Monday in Hong Kong, pending an announcement related to the takeover code. The Shenzhen exchange, where Century Huatong trades, is closed until Wednesday for the Labour Day holiday in China.
No final decision has been made and Leyou could still decide against a transaction, the people said. A representative for Leyou declined to comment, while Century Huatong didn't immediately respond to requests for comment during holidays in China. A spokeswoman for iDreamSky declined to comment, adding the company will provide the latest progress in a timely manner on the stock exchange website.
Century Huatong, founded in 2005, specializes in internet games and auto parts, according to its website. The company's game titles include The Legend of Mir 2, The World of Legend, Crazy Arcade and Final Fantasy 14. It has over 1.8 billion registered users. Last year, the firm completed an acquisition of the online game business of Shanda Games Ltd. in a 29.8 billion yuan ($4.2 billion) deal. Century Huatong's market value was about 87 billion yuan as of April 30.
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