 "Sega Sammy Holdings to buy Angry Birds maker for $776 million")
Video game maker Sega Sammy Holdings. offered to buy Rovio Entertainment Oyj in a deal that values the Finland-based creator of Angry Birds at about €706 million ($776 million).
Sega offered €9.25 per share in cash to the shareholders and €1.48 per option to the option holders of Rovio, according to a statement on Monday. The Finnish company’s board unanimously recommended shareholders accept the offer that is backed by 49 per cent of shareholders, including Rovio’s founding Hed family.
Rovio shares rose as much as 19 per cent to trade at €9.16 each as of 12:00 pm in Helsinki on Monday. The stock has surged more than 50 per cent for the year to date amid deal speculation. Sega fell as much as 6.1 per cent in Tokyo on Monday.
Japan’s Sega is doubling down on console and smartphone gaming for long-term growth as its traditional businesses of pachinko and arcade machines face dwindling audiences and have been in recent years hit by waves of Covid-19 restrictions. Some of its best known titles include Sonic the Hedgehog, Crazy Taxi, and Yakuza. Analysts agree Rovio’s existing games lineup will bring it solid cash flow, but disagree on the deal’s other merits.
“Among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been Sega’s long-term goal to accelerate its expansion in this field,” Sega Chief Executive Officer Haruki Satomi said in the statement.
For Rovio, the famous Angry Birds franchise is the cornerstone of the Finnish company’s operations. First released in app stores in 2009, the branded mobile games generate more than 80 per cent of its gross bookings. It was the first mobile game to reach 1 billion downloads, and Rovio went public in 2017 on the back of its success, with a market value of about €900 million.
Also Read
“The deal’s sole purpose is just to get a stable cash flow for Sega,” said Hideki Yasuda, an analyst at Toyo Securities. “Unfortunately, Rovio hasn’t been able to release new hit games. I can’t see any upside from this deal.” OP Group Analyst Kimmo Stenvall also said Rovio’s existing games “generate good earnings, cash flow is strong and the company has a large net cash position.”
Still, Rovio’s reliance on the Angry Birds has worried investors, and the company has sought to expand to other brands and types of games. It has ‘several’ new games in development and has acquired smaller rivals.