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Tencent to acquire Brit games developer Sumo Group
Pre-bid manoeuvring won 27 per cent of shareholders, £919M offer was a winning move
Chinese gaming and web giant Tencent will acquire UK games developer Sumo Group, which has created games in the Hitman, Sonic, and Little Big Planet franchises, for £919 million (US$1.24B).
News of the deal emerged in a London Stock Exchange statement from Sumo that declared the two parties had agreed to an all-cash transaction.
Sumo Group shares rose 40.5 per cent on the news, to reach the bid price of 513p per share.
Non-executive chair Ian Livingstone said the deal "will help secure and further the aspirations and long-term success of Sumo" because the company "will benefit from Tencent's broad videogaming eco-system, proven industry expertise and its strategic resources".
Sumo CEO Carl Cavers also liked the deal and said that he expects it will allow the company to speed development of its own games and continue to provide development services to third parties.
Cavers said "possible acquisition opportunities" could also flow from the deal.
James Mitchell, senior executive veep and Chief Strategy Officer at Tencent, said the transaction will "accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-tier creative talent, and the UK as a hub for game innovation".
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Tencent was already an investor in Sumo, with an 8.75 per cent stake. Ahead of the announcement it sounded out other shareholders about the buy and won the approval of stakeholders who together represent 27 per cent of scrip.
The deal is subject to regulatory approval, which may be one reason that Tencent is using an entity named "Sixjoy Hong Kong Limited" to run the transaction from the friendlier jurisdiction of the Special Administrative Region rather than using a China-based company.
Tencent has been on something of a games acquisition binge in recent years, and already owns big name studios such as Riot Games and a stake in Fortnite developer (and Apple antagonist) Epic Games, plus plenty more Chinese games developers. ®