The media and gaming investment firm, which owns a 13.6% stake in Drops, said it expects this to rise to 18.6% prior the completion of an all-share acquisition of the investee firm by Fibresources, which is predicted to occur before 31 March.
"The Drops is the first of our six early stage investments in esports to release news and we are optimistic for the value of our investment should the proposed transaction complete”, said Blue Star chief executive Tony Fabrizi.
“The Proposed Transaction is a vital step in The Drops achieving its stated objective of becoming the largest esports brand in Canada on the public markets. It also represents an important confirmation of Blue Star's esports investment thesis and we look forward to making further announcements in due course", he added.
In early trading on Tuesday, Blue Star's shares were 1.3% higher at 0.14p.
--Adds share price--