Monday 26 September 2016

Chinese made play for Ireland-based maker of Candy Crush hit

Published 02/12/2015 | 02:30

A share restructuring linked to the takeover of the Candy Crush maker will be voted on in Dublin next month at William Fry’s offices
A share restructuring linked to the takeover of the Candy Crush maker will be voted on in Dublin next month at William Fry’s offices

A CONSORTIUM of Chinese investors had indicated it was willing to pay $19.50 per share for Ireland-based Candy Crush Saga maker King Digital Entertainment, and could provide $3bn (€2.8bn) of financing to fund the deal.

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But JP Morgan, acting for King, couldn't extract sufficient detail from the consortium about where the financing would come from, and who precisely was involved in the Chinese consortium.

Irish law firm William Fry was among the advisers to King, whose co-founder and chief executive is Riccardo Zacconi.

New regulatory documentation filed by King Entertainment reveals the months-long tussle for control of King, which was concerned about its ability as a standalone business to face challenges.

Activision Blizzard eventually won the approval of the King board of its bid, which values King at $18 a share, or a total of $5.9bn (€5.5bn).

The price was still below King's 2014 IPO price of $22.50 per share.

Shareholders of King Entertainment will get to vote on a share restructuring linked to the takeover by Activision on January 12 at an EGM at William Fry's office in Dublin.

A circular sent to King Digital's shareholders shows that the takeover approach by Activision was precipitated by an approach made in February by a consortium of Chinese investors.

Activision entered the fray in early April, indicating it was interested in acquiring King. By May, the discussions between King and the Chinese consortium had ended.

But in June, a second Chinese consortium emerged that was interested in acquiring King outright.

It eventually indicated it was willing to pay $19.50 a share and could provide as much as $3bn of the financing for their proposed transaction.

The King board, meanwhile, pressed Activision to pay $20 per share for the Candy Crush maker - more than the $18 it had previously indicated.

The Chinese consortium was also told it would have to pay $20 a share. It was also asked again for details on the consortium's composition and its sources of financing for a transaction.

While Activision was offering less, the King board felt it would be in a better position to complete the acquisition. Activision was asked to raise its indicative offer, but wouldn't.

In August, when King's shares dropped to $15.20 on poor quarterly results, the offer from Activision looked increasingly attractive Despite continued interest from the Chinese, the King board backed the Activision takeover on November 2.

Irish Independent

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