London-listed Keywords Studios has confirmed that it is in advanced discussions with Swedish private equity firm EQT to acquire the games services provider.

The offer on the table is GBP 2.2bn (USD 2.8bn), representing a possible cash offer of GBP 25.50 per share. The offer represents a premium of over 70% from Keywords Studios’ closing price of GBP 14.70 on Friday, May 17th.

Keywords made the news public with EQT’s approval following press speculation on the takeover, where it also revealed that Keywords had already received and rejected four offers from the private equity firm.

The current proposal, which represents a “significant increase” from the initial proposal, is subject to the completion of confirmatory due diligence by EQT. The London-listed company stated that the Board “has carefully evaluated the possible offer with its financial advisers” and that it “is at a value that the Board would be minded to recommend to Keywords Studios shareholders.”

Nevertheless, Keywords advised its shareholders to take no action until further notice, given the condition of the offer. It added that “the Board remains confident in the company’s growth strategy of building the only truly global platform providing solutions to the video games and entertainment industries, both organically and through acquisitions, and EQT is supportive of this strategy.”

The news follows the release of Keywords’ 2023 financial results in March 2024, which CEO Bertrand Bodson described as being “a difficult year for the industry” despite delivering a resilient performance in 2023. The company posted final full-year revenues of EUR 780.4m (USD 844.6m) compared to EUR 690.7m (USD 747.6m) in 2022.

With media localization (an increasingly important business line for Keywords) picking back up in 2024, the outlook may be brighter in 2024. EQT has until June 15 to make a firm offer or walk away, following its due diligence of the company.

On announcement of the news, Keywords’ share price soared by over 60%, reaching new highs of GBP 23.78 per share — a price not seen since April 2023.

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