Leyou Signs Exclusive Agreement with Tencent Regarding the Company’s Acquisition

Jul 10, 2020
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Leyou Technologies has been recently rumored to be about to receive a bid by Sony. However, the company's trading was briefly halted today as Leyou shared the following news on the acquisition talks.

They have now entered into an exclusive agreement with Tencent, as detailed below.

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The Board announces that on 10 July 2020 (before trading hours), Mr. Yuk and the Company
entered into an exclusivity agreement (the “Privatization Exclusivity Agreement”) with
Tencent Mobility Limited (the “Potential Acquiror”), a wholly-owned subsidiary of Tencent
Holdings Limited, a company whose shares are listed on the Stock Exchange (stock code:
700), regarding a possible acquisition and privatization of the Company (the “Possible
Privatization”).

However, it is important to note that negotiations between Leyou and Tencent are still very much ongoing and there is no guarantee that the acquisition will indeed be completed.

As at the date of this announcement, negotiations are still in progress and there is
no certainty (a) as to the terms of the Possible Privatization and (b) that the Possible
Privatization will proceed or that it will result in a binding agreement. There is no
assurance that any negotiations mentioned in this announcement will either materialize
or eventually be consummated and the negotiations may or may not lead to a possible
acquisition and privatization of the Company.

Leyou is a video game holding company previously known as Sumpo Food from its chicken meat supplier days. Over the years, they have acquired Digital Extremes (Warframe), Splash Damage (Gears Tactics), Radiance Games, and Kingmaker. Leyou also invested in a 20% minority stake of Certain Affinity, which is developing a Transformers Online game, and more recently launched the publishing label Athlon Games, known to be working alongside Amazon Game Studios on a new Lord of the Rings MMO. More recently, Athlon Games became the worldwide publisher of Samurai Shodown and a shareholder in the company that acquired the assets of the defunct Telltale Games.

Meanwhile, Tencent would continue to invest in the games industry. They already own Riot Games, Funcom and Sharkmob, as well as stakes in developers such as Supercell (84%), Grinding Gear Games (80%), Epic Games (40%), Marvelous (20%), Netmarble (over 17%), Kakao (over 13%), Sumo Digital (10%), Frontier Developments (9%), Activision Blizzard (5%), Paradox Interactive (5%), Ubisoft (5%), and Bluehole (1.5%). Tencent also invested in PlatinumGames and YAGER and recently scooped up System Shock 3 from Otherside Entertainment.

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