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European private equity group EQT is in talks to buy video game services company Keyword Studios for £2.2 billion, in the London-listed company's latest potential acquisition.
EQT is negotiating a cash offer of £25.50 per share. According to a statement from Keyword, the company has already made four unsolicited proposals for the business, all of which have been rejected by the board of directors.
EQT's offer represents a premium of more than 70% over its stock price at the close of trading on Friday.
The latest offer is a “significant increase” from the original bid, and if a solid bid is made, Keyword Studio's board “intends to recommend” it to shareholders, the company said. Ta.
Shares in Dublin-based Keyword Studios rose 5% in Friday trading to close at £14.70 per share.
The company's board remains confident in its growth plans, including expansion through acquisitions, and said EQT supports the company's strategy.
Listed on London's Junior Aim Market, Keywords Studios was founded in 1998 and has more than 13,000 employees across 26 countries. We provide services from game art to marketing and testing.
Its customers include Activision Blizzard, Electronic Arts, and Tencent, and it has worked on games such as Fortnite and League of Legends.
It was listed in 2013 with a market valuation of less than £50m.
Recently, the company's stock has more than halved from its September 2021 peak as investors worry that some services, such as translation, could be replaced by artificial intelligence.
The company reported record revenue of 780 million euros in 2023, up 13% year-on-year, but pre-tax profit fell 49% to 35 million euros. The company, which also provides services for film and television production, blamed the US writers' strike for a loss of 20 million euros in revenue in the second half of last year.
Sweden's EQT is one of the largest private investment firms and has previously acquired UK-listed companies such as animal health company Decra. The Group manages assets of €242 billion.
EQT and Keyword's talks come as takeover interest from UK-listed companies has reached its highest level since 2018, with weak share prices attracting foreign investors.
In April, US private equity firm Thoma Bravo agreed to buy UK-listed cybersecurity firm Darktrace for £4.3bn.
Under UK takeover rules, EQT has until June 15 to provide firm commitments or exit.
