Keywords Studios set for £2bn takeover by personal fairness agency EQT
- Keywords revealed it received a new £24.50 per share offer from EQT
- EQT now has until 5pm on 3 July to put forward a concrete proposal
The board of Keywords Studios is set to ask investors to back a new $2.5billion (£1.96billion) private equity takeover approach.
The video game services company revealed it has received a new £24.50 per share bid from Swedish private equity giant EQT, a 20 pence increase on a previous proposal made on Wednesday.
Following consultation with financial advisers, the Dublin-based group said it ‘would be minded to recommend’ the deal to shareholders if EQT declares an intention to make an official offer.
Offer: Video game services company Keywords Studios has received a new £24.50 per share bid from Swedish private equity giant EQT
Under City takeover rules, EQT now has until 5pm on 3 July to put forward a concrete proposal or walk away.
Keywords first announced it was conducting takeover discussions with EQT in May and had rejected four unsolicited offers from the Dechra Pharmaceuticals owner.
The AIM-listed firm provides technical and creative services to many of the world’s largest video game manufacturers, such as Microsoft, Ubisoft, Electronic Arts and Activision Blizzard.
These include producing trailers, voiceovers, artwork, social media posts, music scoring, and translating in-game text into dozens of languages.
It enjoyed a major boost from the Covid-19 pandemic as tough lockdown restrictions across the world led to people spending more time indoors.
The group has further expanded through an extensive series of acquisitions, buying the likes of Heavy Iron Studios, Smoking Gun Interactive, and Forgotten Empires.
However, Keywords Studios shares have fallen significantly from their peak of over £33 in September 2021 due to concerns that artificial intelligence threatens the video game industry.
They were 5.7 per cent, or 124p, higher at £23.02 on Friday morning.
Keywords further announced on Friday that its annual results would be weighted to the second half of this year owing to ‘slower content creation trends that are currently dampening industry spend’.
For the latter six months of 2024, the firm anticipates organic growth of around 10 per cent, supported by strong spending from large clients and content production across Hollywood ramping up.
Its potential takeover comes amid a large volume of acquisition activity involving London-listed businesses, which are perceived as undervalued when compared to their global peers.
Royal Mail’s parent company, International Distributions Services, has agreed to a £3.6billion bid from Daniel Kretinsky, a Czech billionaire with substantial stakes in Sainsbury’s, Foot Locker and West Ham United.
Packaging business DS Smith, cybersecurity specialist Darktrace, and telecoms testing group Spirent Communications have also accepted takeover offers in recent months.
