Tencent in Talks to Acquire Hong Kong-Listed Gaming Firm Leyou

Tencent Holdings Ltd. is in advanced talks to take Chinese gaming firm Leyou Technologies Holdings Ltd. private, edging out other potential suitors including Sony Corp. in a battle for the Hong Kong-listed company.

Tencent Mobility Ltd., a wholly-owned unit of the Chinese tech giant, has entered into an exclusive agreement with Leyou for a potential privatization, Leyou said in an exchange filing on Friday. That confirmed an earlier Bloomberg News report.

Leyou didn’t provide any financial details in the statement and said there’s no certainty an agreement will be reached. The exclusive agreement is valid for three months, it said.

Trading in Leyou, which has a market value of about $1.1 billion, will resume on July 13.

Leyou’s controlling shareholder Charles Yuk had been in talks with Tencent-backed iDreamSky Technology Holdings Ltd. for a majority stake sale since late last year. In May, Leyou confirmed it received another non-binding offer from Zhejiang Century Huatong Group Co., a Shenzhen-listed gaming firm that also counts Tencent as a shareholder.

Tencent’s offer could resolve what had been an escalating contest for Leyou, with Sony considering joining the bidding, Bloomberg News reported earlier this month.

Century Huatong said on Friday, before Leyou’s announcement, that it had ended the takeover talks with the gaming firm.

©2020 Bloomberg L.P.

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