Sony weighs bid for Hong Kong-listed gaming firm Leyou, paving way for intensified bidding war

In May, Leyou confirmed it had received a non-binding takeover offer from Shenzhen-listed rival Zhejiang Century Huatong Group

It has also had buyout talks with other bidders including iDreamSky Technology Holdings, which counts Tencent among its investors

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Sony’s chief executive officer Kenichiro Yoshida attends a news conference at the company's headquarters in Tokyo, Japan May 22, 2018. Photo: Reuters

Published: 9:54am, 3 Jul 2020Updated: 9:54am, 3 Jul 2020

Sony is weighing a bid for Leyou Technologies Holdings, people familiar with the matter said, paving the way for an intensified bidding war for the Hong Kong-listed gaming firm.

The Japanese tech giant is working with a financial adviser on the potential offer for Leyou, said the people, asking not to be identified because the matter is private. In May, the Chinese gaming firm confirmed it had received a non-binding takeover offer from Shenzhen-listed rival Zhejiang Century Huatong Group, after months of buyout talks with other bidders including iDreamSky Technology Holdings.

Shares of Leyou extended their gains to as much as 9.8 per cent after the Bloomberg News report. The stock has risen about 20 per cent this year, giving the company a market value of about US$1.1 billion.

Leyou’s controlling shareholder Charles Yuk had been in talks with iDreamSky for a majority stake sale since late last year. iDreamSky, which counts Tencent Holdings among its investors, had been in discussions with CVC Capital Partners for a joint offer valuing Leyou at about US$1.23 billion but the Covid-19 pandemic brought their talks to a stalemate, Bloomberg News reported in April.

Sony is hoping that it can edge out other bidders with greater certainty of financing, the people said. Leyou’s Yuk aims to choose a buyer and sign an agreement as soon as this month, the people said.

Talks are still ongoing and no final decision has been made, the people said. Other bidders could still emerge, they said. Representatives for Leyou and Sony declined to comment.

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