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Sumo surges as Chinese giant Tencent takes 10% stake

Based in Shenzhen in China, Tencent is the world's largest gaming company with a market cap of nearly £300bn

Sumo Group PLC - Sumo surges as Chinese giant Tencent takes 10% stake
Analysts predict Tencent's stake may improve Sumo's relationships in the Chinese market

Shares in video game developer Sumo Group PLC (LON:SUMO) soared on Friday after it revealed that Chinese group Tencent, the world’s largest gaming company, has purchased a 10% stake in the firm.

"We are delighted that Tencent have chosen to acquire a shareholding in the Company, and we look forward to working with Tencent to explore co-development opportunities”, said Sumo chief executive Carl Cavers.

READ: Sumo sounds confident note on outlook as UK video game market reaches record value

Tencent has acquired its holding in the company from private equity group Perwyn, which following the sale now owns 17.4% of Sumo.

Analysts at Peel Hunt, which rate Sumo at a ‘buy’ rating with a 200p target price, said Tencent’s involvement “could enable Sumo to have stronger relationships in China with respect to both launching its own games in the region, but also gaining new clients for its core co-dev model”.

The news drove Sumo’s shares 7.1% higher to 165p in early deals.

Quick facts: Sumo Group PLC

Price: 167.25 GBX

AIM:SUMO
Market: AIM
Market Cap: £251.88 m
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