19th Jul 2021 09:08
(Alliance News) - Sumo Group PLC on Monday said it has agreed to a takeover offer by Chinese technology giant Tencent Holdings Ltd at an equity valuation of GBP919 million.
Existing shareholder Tencent offered 513 pence per share in cash for the Sheffield-based provider of creative and development services to the video game industry, a 43% premium to Sumo's closing price on Friday of 358.00p.
Shares in Sumo were up 42% to 508.17p in London on Monday morning.
Tencent already owns 8.8% of Sumo and, including these shares, has support for its offer representing 33% of Sumo's equity. It has been a shareholder since 2019.
Sumo was founded in 2003 and is a co-development partner to video game publishers including Sony Group Corp and Microsoft. It went public on the AIM market in 2017, priced at 100p per share.
Shenzhen-based Tencent owns several video game studios across the world, as well as social media and music publishing businesses.
Tencent has confirmed that will not make any material changes to management or the skills and conditions of employees, Sumo said.
"The board of Sumo firmly believes the business will benefit from Tencent's broad video-gaming ecosystem, proven industry expertise and its strategic resources, which will help secure and further the aspirations and long-term success of Sumo," Chair Ian Livingstone said.
Tencent Chief Strategy Officer James Mitchell said: "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."
By Ivan Edwards; [email protected]
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