Sumo board recommends all-cash offer from Tencent

(Sharecast News) - Video games company Sumo Group announced on Monday that it has agreed the terms of a recommended all-cash acquisition by Chinese technology conglomerate Tencent through its indirect wholly-owned subsidiary Sixjoy Hong Kong.
The AIM-traded firm said that under the terms of the acquisition, Sumo shareholders would receive 513 p in cash for each Sumo share they hold.

Its board noted that the price valued the entire issued and to-be-issued share capital of Sumo at £919m on a fully-diluted basis, and represented a premium of 43.3% to the closing price of 358p per Sumo Share on 16 July.

The directors of Sumo said they considered the terms of the acquisition to be "fair and reasonable", and in the best interests of shareholders as a whole, and thus intended to unanimously recommend that shareholders vote to approve the scheme.

"Tencent has a strong track record for backing management teams and their existing strategies," said Sumo chief executive officer Carl Cavers.

"Alongside the acceleration of own-intellectual property work, Tencent has demonstrated its commitment to backing our client work and has stated its intention to ensure that we have the necessary investment to continue focusing on work with our key strategic partners on turn-key and co-development projects.

"We love what we do and have some amazing relationships with the world's best video games publishers."

James Mitchell, chief strategy officer and senior executive vice-president of Tencent, said Tencent viewed the proposed combination as an "evolution" of the two company's existing partnership.

"Tencent is a committed investor in the game industry, with a track record of supporting the growth of game studios around the world.

"We hold Sumo's team and the games they produce in high regard, and its strategy and spirit of innovation have underpinned the success of the business over many years.

"Tencent intends to bring its expertise and resources to accelerate the growth of Sumo both in the UK and abroad, supporting Sumo in the market for top-tier creative talent, and the UK as a hub for game innovation."

At 1917 BST, shares in Sumo Group were up 41.95% at 508.17p.