Gaming News

To partly fund Supercell acquisition, Tencent secures $850 million from a cohort of investors

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In June, Chinese investment holding firm Tencent Holdings announced that it will takeover the reigns of Swedish game development firm Supercell from SoftBank. During the acquisition deal, Tencent had said that it will form a consortium with co-investors, who’ll each own some share in the gaming company.

In regards to same, Tencent today announced that the consortium formed to acquire majority stake in Clash of Clans game developer Supercell has added $850 million towards the acquisition money pool. The company has agreed to acquire 84 per cent of the gaming company and the transaction has been valued at about $8.6 billion.

The fresh influx of funds have been secured by selling new shares to Chinese state-owned investment firms AVIC Capital and CITIC Capital. It also witnessed participation from other backers including the likes of Hong Kong-based CNCB, HundredCells Investment Co., and others.

Tencent plans to use the cash raised from the aforementioned investors to partly fund the SuperCell acquisition, while the rest of the capital is being financed using bank loans. Prior to this announcement, the consortium already had already banked a total of $3.72 billion required for acquisition. It has also received commitments of over $1.8 billion from a cohort of banks to fund the acquisition.

Thus, if you add up all investments being poured in for the game developers acquisition, Tencent probably has the exact amount of funds required to pay SoftBank for the acquisition. The Supercell deal is expected to be finalised in a week or two. The official regulatory statement reads,

The Company expects that the Consortium will complete the Supercell Acquisition through the Buyer on or around 27 October 2016.

After the sale of the shares is complete, the co-investors, which now includes China’s CITIC Bank and bad debt manager China Cinda Asset Management, will collectively own about 50 per cent of voting equity interest in the Consortium. Thus, the consortium will cease to be a subsidiary of the company and  indirectly hold 76.9% of Supercell’s securities.

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