Consortium led by Shanghai Giant Network Technology Co. to pay $4.4 billion for Caesars Interactive subsidiary
It appears from weekend reports by Bloomberg and Reuters that agreement has been reached on the acquisition of Caesars Interactive Entertainment social game development subsidiary Playtika by a consortium led by Shanghai Giant Network Technology Co..
The news agencies report that a consideration of $4.4 billion in cash has been agreed by the consortium, which includes Yunfeng Capital, the private equity company founded by Alibaba Group Holding Ltd. Chairman Jack Ma; China Oceanwide Holdings Group Co; China Minsheng Trust Co. and Hony Capital Fund.
The consortium revealed Sunday that agreement has been reached, and that Playtika will remain independently run from its headquarters in Herliya, Israel.
"The deal gives the Chinese buyers a foothold in a fast-growing segment of the gaming industry, as users turn to mobile applications over the PC- and console-based systems," Bloombergs noted.
The reports also quote analysts who point to the online gambling bans in China, but comment:
"Despite the legal issues in China, these Chinese investors are more comfortable playing the long game. Online gaming, eventually, should be massive after the various regulatory hurdles are worked out even if it takes a significant number of years."
Caesars bought Playtika in 2011 and the virtual currency used on the Playtika social casino games will continue not to be exchangeable for real money, according to Sunday's statement.
Initial reaction from Playtika was positive, with chief executive officer and founder Robert Antokol opining that the deal will give the company significant commercial opportunities, especially regarding access to large and rapidly growing emerging markets.
Negotiations on the auction sale of Playtika have been ongoing for some time, with Giant emerging as the preferred partner.
Mitch Garber, CEO of Caesars Interactive, claimed that Playtika is both profitable and growing, with a staff of 1,300, a raft of successful game titles and millions of daily users.
CIE acquired Playtika in 2011 for $90 million, when it had a staff of just 15 people. CIE has since invested substantially in expanding the company.
Conditional on regulatory approval, it is expected that the agreement will complete in the third or fourth quarter of this year.
Online Casino News Courtesy of Infopowa