Sina-led consortium said to be in final talks to buy stake in Yoozoo Games
- Shanghai-based Yoozoo is known for developing Game of Thrones: Winter is Coming, a real-time strategy video game released in 2019
- The Sina-led group plans to initially buy at least 18 per cent of Yoozoo, estimated to be worth about US$447 million
The consortium is in final talks with Yoozoo chairwoman Xu Fenfen to initially buy at least 18 per cent of the company, the people said. An 18 per cent stake in Yoozoo is worth about 2.86 billion yuan (US$447 million) based on the Shenzhen-listed company’s market value of US$2.5 billion on Friday.
Yoozoo declined to comment. The Shanghai-based developer released in 2019 Game of Thrones: Winter is Coming, a real-time strategy video game based on the HBO fantasy drama television series Game of Thrones and the A Song of Ice and Fire books.
Sina, which one source said would set up a special-purpose vehicle for the deal, and Weibo did not immediately respond to requests for comment.
In a stock exchange filing last week, Yoozoo said Xu was considering equity transfer-related issues and had made relatively substantial progress.
Reuters reported in April that Bilibili was in talks to buy a 24 per cent stake in Yoozoo as part of a nearly 5 billion yuan deal. But the online video-sharing service operator dropped the deal, as it was not moving as fast as Sina, according to one of the sources.
Xu has also become the legal guardian of the inheritors of Lin, who was also Yoozoo’s actual controller with a 24 per cent stake, since his death, according to the company’s filings.
The Sina-led consortium is also looking to buy the remainder of the 24 per cent stake in the coming months, said the people.
The consortium is seeking to finalise the deal in the coming weeks, the sources said.
In addition to the stake purchase, the consortium has also stepped in to help solve the debt problem that Lin left, said the two people.
China’s video games industry continues to boom post-pandemic
Xu in late April managed to repay 801.7 million yuan that Lin had taken up of the company’s funds, according to Yoozoo’s filing on Friday. One of the sources said Xu secured the capital mainly from Sina and its affiliates.
One main attraction for the consortium to partner with Yoozoo is content opportunities. Yoozoo has sole rights globally for film and TV adaptations of the Hugo Award-winning science-fiction novel The Three-Body Problem .
As one of China’s first tech firms to list on the Nasdaq in 2000, Sina makes most of its revenue from online advertising on its news portals and Weibo.
That has worried investors as the growth rate of Chinese online advertising slows, and Sina has also lost ground amid fierce competition with the likes of Tencent Holdings and ByteDance.
