EQT in discussions to purchase UK-listed online game group for £2.2bn

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.European personal fairness group EQT is in superior discussions to purchase video sport providers firm Key phrases Studios for £2.2bn, within the newest potential takeover of a London-listed firm.EQT is negotiating over a money provide of £25.5 per share. It has already made 4 unsolicited proposals for the enterprise, all of which have been rejected by its board, in response to an announcement from Key phrases.The EQT provide is a greater than 70 per cent premium on the inventory’s worth on the shut of buying and selling on Friday.The newest proposal is a “important enhance” from the preliminary bid and the board of Key phrases Studios “could be minded to advocate” it to shareholders if a agency bid is made, the corporate mentioned. Dublin-based Key phrases Studios’s shares rose 5 per cent in Friday buying and selling to shut at £14.70 a share.The corporate’s board mentioned that it stays assured about its development plans together with increasing by means of acquisitions, and that EQT supported its technique.Key phrases Studios, which is listed on London’s junior Intention market, was established in 1998 and has greater than 13,000 staff in 26 international locations. It supplies providers from sport artwork to marketing and testing.Its purchasers embody Activision Blizzard, Digital Arts and Tencent, and it has labored on video games equivalent to Fortnite and League of Legends.It floated in 2013 at a market valuation of lower than £50mn. Extra not too long ago, its share value has greater than halved from a peak in September 2021, as buyers have nervous in regards to the potential for a few of its providers, equivalent to translation, to be supplanted by synthetic intelligence.The corporate reported file revenues of €780mn in 2023 — up 13 per cent year-on-year — whereas its pre-tax revenue fell 49 per cent to €35mn. It additionally supplies providers to movie and tv manufacturing and blamed the US writers’ strike for €20mn of misplaced revenues within the second half of final yr.Sweden’s EQT is among the many greatest personal funding corporations and has beforehand purchased UK-listed corporations equivalent to veterinary prescribed drugs firm Dechra. The group has ​​€242​‌bn of property beneath administration.The discussions between EQT and Key phrases come as takeover curiosity in UK-listed corporations has reached its highest degree since 2018, pushed by depressed share costs which can be attracting international buyers.In April, US personal fairness agency Thoma Bravo agreed to purchase UK-listed cyber security firm Darktrace in a £4.3bn deal.Below UK takeover guidelines, EQT has till June 15 to both make a agency provide or stroll away.

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