Chinese gaming and tech conglomerate Tencent has made a pending offer to buy out the Norwegian developer behind Conan and Dune, Funcom. The Chinese firm has made an offer to fully acquire Funcom, the games maker behind Conan and various other online titles. The acquisition would help the major company build out it’s ever-widening portfolio of gaming companies and related products.
First reported by Polygon, Tencent offered to buy Funcom as a wholly owned subsidiary. The purchase price was reportedly around 27 per cent above the closing market value of the game developer. which would push the value of the company to $148 million (NOK 1.33 billion). Tencent made the offer to buyout via an “indirectly owned subsidiary.” The two main management boards of Funcom “unanimously decided to recommend Funcom’s shareholders to accept the offer.” It will now be up to the shareholders to agree or disagree with the sale, and the Oslo-based financial institutions to approve according to the relevant laws.
The offer will now have to proceed through the legal system, and pending a formal cash offer from Tencent, we should expect ownership to change hands within months.
Tencent has been explosive in terms of growth and revenue, primarily due to it’s aggressive investment strategy. Tencent is one of the world’s biggest video game companies: in its last reported quarter (Q3 in November), Tencent said that it make RMB28.6 billion ($4.1 billion) in online gaming revenue, with smartphone games accounting for RMB24.3 billion of that.
The strategy for Funcom post-acquisition, if it goes through, will likely remain very similar to what it is now. The company has published “around 30 game titles across several genres.” Tencent is already the largest individual shareholder in Funcom, holding around 29 per cent of the publicly traded stock in Funcom. The company bought the majority of the stock from KGJ Capital (which had previously been the biggest shareholder) in September 2019.
“Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games,” said Funcom CEO Rui Casais during that initial buyout. “The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”
“We have a great relationship with Tencent as our largest shareholder and we are very excited to be part of the Tencent team,” Casais said in a statement today.