Chinese Internet giant Tencent is in early stage talks to buy SoftBank’s majority stake in Clash of Clans maker Supercell, The Wall Street Journal (WSJ) reported.
As yet, it is not clear if the Japanese telecoms giant is also in discussion with any other parties.
Tencent’s president, Martin Lau, and chief strategy officer, James Mitchell, flew to Helsinki to convince Supercell’s founders, who have veto power, to support a sale, the report said.
But the founders “prefer to keep the company’s management under SoftBank given it gets complete autonomy”.
SoftBank bought a 51 per cent stake in Supercell for $1.53 billion back in 2013, and raised its stake to 73 per cent last year for an undisclosed amount. A WSJ source said the Finnish game publisher was valued at around $5.25 billion last year.
Last year, Chinese game developer Giant Interactive Group teamed up with Alibaba to talk to SoftBank and Supercell about an acquisition, and both parties are still interested, although price has reportedly been an obstacle.
SoftBank is Alibaba’s largest shareholder.
Supercell has a small portfolio of games but its 2015 annual revenue increased by 36 per cent year-on-year to €2.11 billion ($2.3 billion), with EBITDA of €848 million, an increase of 65 per cent.
In 2015, it only had Clash of Clans, Boom Beach and Hay Day to its name, though in 2016 it launched a fourth, Clash Royale, which it claims is the number one top grossing iPhone game in 44 countries, as of 6 March.
It also announced that it had reached the milestone of 100 million daily active users.
Meanwhile, Tencent is a leader in PC games thanks to its US unit Riot Games, and it wants to “beef up” its mobile games profile.
Last year, it bought minority stakes in US mobile game publishers Glu and Pocket Gems and is reportedly raising $4 billion for more acquisitions.
Back in March it announced that its smartphone games generated CNY21.3 billion ($3.3 billion) revenue in 2015, an increase of 53 per cent year-on-year, and said that “looking forward, we aim to broaden smartphone game activities in China into new game genres”.
As for SoftBank, its portfolio of videogame companies has come under scrutiny as a sale of such assets would improve its balance sheet. It lists Supercell as an “investment asset”.
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