Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: China's Bilibili in talks to buy Yoozoo Games' stake in $765 million deal - sources

TechnologyApr 08, 2021 04:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Julie Zhu

HONG KONG (Reuters) - China's Bilibili (NASDAQ:BILI) is in talks to buy a 24% stake in Yoozoo Games as part of a nearly 5 billion yuan ($765 million) deal, two people said, as the online video site aims to tap its legion of young users to grow in the world's top gaming market.

The move comes after Bilibili, which is backed by Chinese technology giants Tencent Holdings (OTC:TCEHY) and Alibaba (NYSE:BABA) Group Holding, raised about $2.6 billion in a secondary listing in Hong Kong last month.

It also comes as Yoozoo, the video game company that is also known as Youzu Interactive, is facing management challenges after its chairman died under suspicious circumstances in December.

A majority of Bilibili's more than 200 million monthly active users in December were young people, and it is this customer-base demographic that the Shanghai-based firm hopes will fuel its growth in the $44 billion Chinese gaming market.

The gaming industry received a boost last year after the COVID-19 pandemic forced many residents to stay at home, driving up game downloads and boosting the revenues of the companies. A majority of gaming customers in China are young.

Bilibili is in talks on the deal with Xu Fenfen, chairwoman of Yoozoo, said the two people and another person with direct knowledge of the matter.

Last month, Bilibili and its founder Chen Rui submitted to Xu a term sheet - a non-binding agreement describing the basic terms and conditions of an investment - said the first two people.

A 24% stake in Yoozoo is worth about $475 million based on the Shenzhen-listed company's market capitalisation of $1.98 billion on Wednesday.

In addition to the stake purchase, Bilibili and Chen are looking to acquire Yoozoo's headquarters building in Shanghai and take on debt of nearly 700 million yuan the company's late founder Lin Qi left, said the two people.

Bilibili, which last week invested HK$960 million ($123 million) for a 4.72% stake in online game developer X.D. Network, could team up with some Shanghai-based state investors to form a consortium for the deal, they added.

A Bilibili spokeswoman denied it was seeking a deal with Yoozoo. Yoozoo, which is the developer of the popular 'Game of Thrones: Winter Is Coming' game, did not reply to a request for comment.

Another attraction for Bilibili to team up 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.

"It could also bring Bilibili or any other potential buyers closer to co-developing the IP rights of Chinese best seller The Three-Body Problem together with Yoozoo," said one of the sources.

The deal discussions come against a backdrop of growing challenges for Yoozoo's Xu, said the sources. Xu moved into the helm after Lin died in what local police characterised as suspected poisoning.

Bilibili rival Kuaishou Technology also held talks for the stake purchase and The Three-Body Problem-related co-development. But Kuaishou has yet to submit a term sheet, said one of the people and a fourth person with knowledge of the matter.

Kuaishou did not respond to a request for comment.

Exclusive: China's Bilibili in talks to buy Yoozoo Games' stake in $765 million deal - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email