Tencent nears deal to buy majority stake in Supercell-source (updated)
16/06/2016 01:31
* Deal will value Supercell at more than $9 bln - source
* Tencent may announce accord as early as next week - WSJ
* Deal would mark SoftBank's third asset sale in a month
(Adds company, industry context)
June 15 (Reuters) - Tencent Holdings Ltd 0700.HK is
nearing a deal to buy a majority stake in Finnish games maker
Supercell Oy, a person familiar with the matter said, marking
the latest push by China's biggest social network and online
entertainment company into the lucrative gaming industry.
Tencent plans to buy the stake in Supercell from Japanese
media and telecoms company SoftBank Group Corp 9984.T , valuing
the maker of the popular mobile game 'Clash of Clans' at more
than $9 billion, the person said, declining to be identified
because the matter was confidential.
Known for investing in game developers through partnerships
and minority stakes, Tencent owns 'League of Legends' developer
Riot Games and has a stake in Activision Blizzard Inc ATVI.O ,
the owner of the 'Call of Duty' franchise.
Last year, it bought a 15 percent stake in mobile game
developer Glu Mobile Inc GLUU.O , which developed the 'Deer
Hunter' and 'Kim Kardashian: Hollywood' games, for $126 million
in a move to expand in the U.S. gaming market.
Online gaming has long been Tencent's main cash cow. The
company reported a 43 percent revenue rise in the first quarter,
aided by growth in its gaming and advertising businesses.
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Tencent, which is in late-stage talks with SoftBank, is in
discussions with several financial investors, including
Hillhouse Capital Group, to join in the purchase as
co-investors, the Wall Street Journal reported on Wednesday,
citing people familiar with the matter. (http://goo.gl/XqrgZy)
An agreement could be disclosed as early as next week, the
report said.
Tencent and SoftBank declined to comment, while officials at
Supercell were not immediately available to comment.
A deal with Tencent will also mark the third major asset
reshuffle by SoftBank in less than a month.
The Japanese media and telecoms company announced a plan
earlier this month to sell $10 billion worth of shares in
Chinese-e-commerce giant Alibaba Group Holding Ltd BABA.N to
cut debt, as well as a decision to sell its stake in GungHo
Online Entertainment Inc 3765.T back to the mobile game maker
for 73 billion yen ($691 million).
SoftBank expects to book a profit of 200 billion yen to 250
billion yen ($1.89 billion-$2.36 billion) this financial year
from the Alibaba share sale, which will reduce its stake in the
Chinese firm to around 27 percent from 32.2 percent.
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SoftBank said last year it had increased its controlling
stake in Supercell to 73.2 percent, without disclosing financial
details. Together with GungHo it had bought a majority stake in
the mobile games maker in 2013 for about $1.5 billion.
($1 = 105.6900 yen)
(Reporting by Arunima Banerjee in BENGALURU and Liana Baker in
SAN FRANCISCO; Writing by Miyoung Kim; Editing by Shounak
Dasgupta and Kenneth Maxwell)
((Arunima.Banerjee@thomsonreuters.com; within U.S. +1 646 223
8780, outside U.S. +91 80 6749 4046; Reuters Messaging:
arunima.banerjee.thomsonreuters.com@reuters.net))
Keywords: SUPERCELL STAKE/TENCENT HOLDINGS