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European non-public fairness group EQT is in superior discussions to purchase online game companies 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 had been rejected by its board, in line with a press release 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 suggest” 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 progress plans together with increasing via acquisitions, and that EQT supported its technique.
Key phrases Studios, which is listed on London’s junior Purpose market, was established in 1998 and has greater than 13,000 staff in 26 international locations. It supplies companies from recreation artwork to advertising and marketing and testing.
Its shoppers embrace Activision Blizzard, Digital Arts and Tencent, and it has labored on video games akin to Fortnite and League of Legends.
It floated in 2013 at a market valuation of lower than £50mn.
Extra lately, its share worth has greater than halved from a peak in September 2021, as buyers have nervous concerning the potential for a few of its companies, akin 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 companies 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 largest non-public funding companies and has beforehand purchased UK-listed companies akin to veterinary prescribed drugs firm Dechra. The group has €242bn of belongings below administration.
The discussions between EQT and Key phrases come as takeover curiosity in UK-listed firms has reached its highest degree since 2018, pushed by depressed share costs which are attracting international buyers.
In April, US non-public fairness agency Thoma Bravo agreed to purchase UK-listed cyber safety 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.
