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Tencent bids to acquire 100% of Funcom

Proposed deal would value the Norwegian studio at around $148 million

Tencent has launched a bid to acquire all shares in Funcom, in a deal that values the Norwegian online developer at around $148 million.

The Chinese firm is already the single largest shareholder in Funcom, following the acquisition of 29% of its stock in September last year. However, Tencent now wishes to acquire all remaining shares -- a prospect that has been welcomed by Funcom's management team.

"We have had a great relationship with Tencent as our largest shareholder so far and we are excited about this opportunity," said Funcom CEO Rui Casais in a statement. "Tencent will provide Funcom with operational leverage and insights from its vast knowledge as the leading company in the game space."

"Tencent will provide Funcom with operational leverage and insights from its vast knowledge as the leading company in the game space"

Funcom

Tencent is offering NOK 17 per share, which is 27.3% higher than the price at the close of trading on January 21, 2020. The offer values Funcom at NOK 1.33 billion ($148 million).

Remaining shareholders are free to reject Tencent's advances, but Funcom's management and supervisory board has issued a statement recommending that they accept during the offer period. The process is expected to start in February.

"We are impressed by Funcom's strengths as a developer of open-world multiplayer, action and survival games," said Steven Ma, senior vice president of Tencent, in a statement. "Funcom has a strong track-record in developing new titles with long life-span."

In addition to operating its hit survival title Conan Exiles, Funcom is currently working on an adaptation of the classic science-fiction novel, Dune. The game has been in production for two years, and the company's management believes that "the scope and ambition level for the Dune game should be larger than Conan Exiles to allow the game the best possible chance of maximizing its very large potential."

A statement from Funcom also suggested that "additional financing" is desirable for Dune, and that the full acquisition of the company by Tencent would allow that to happen.

While the deal is not final, Funcom's investors certainly have an incentive to sell at the price Tencent is offering. A decade ago, the company was mired in losses, redundancies and financial problems, a turbulent period that only truly finished with the success of Conan Exiles.

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