Chinese gaming giant Tencent Holdings has agreed a near-£1bn takeover of Sumo Group PLC (LON:SUMO), a video games developer, designer and industry services provider.
The deal values the British company at £919mln ($1.3bn), the pair said in a statement.
Shareholders in Sumo will receive 513p cash per share, a 43% premium to Friday's closing price and a multiple of 55 times on an EV/EBITDA basis.
Tencent first bought a 10% stake in the AIM-listed company in late 2019 at around 150p, two years after it floated on the junior market at a price of 100p. This stake was since diluted to 8.75% but the Shenzhen-based group has also received irrevocable undertakings in favour of the deal from investors holding circa 27% of Sumo shares in issue.
Sumo’s board intends to unanimously recommend the offer, it said, while Sumo chairman Ian Livingstone added: "The board of Sumo firmly believes the business will benefit from Tencent's broad videogaming eco-system, proven industry expertise and its strategic resources, which will help secure and further the aspirations and long-term success of Sumo."
Games that Sumo has developed or co-developed include ‘Hitman 2’, 'Sackboy: A Big Adventure', ‘Outrun 2', ‘Snake Pass’ and ‘Spyder’, plus ‘Sonic & All-Stars Racing: Transformed’ and ‘Team Sonic Racing’ for SEGA, ‘LittleBigPlanet 3’ for Sony and ‘Forza Horizon 4’ for Microsoft.