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.
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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.