Japan's Sega Sammy Holdings said today it planned to acquire Finland's Rovio Entertainment for €706m to bolster its mobile gaming business, sending Rovio shares soaring.
Sega Sammy will offer €9.25 for each share of the company behind the mobile game Angry Birds, a 19% premium over Friday's closing price, in its tender offer bid set to be launched around May 8.
Following the announcement, Rovio shares rose as much as 18.8% in early trade in Europe.
"In the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been Sega's long-term goal to accelerate its expansion in this field," Sega Sammy CEO Haruki Satomi said in a statement.
The Sega Sammy announcement said Rovio's board of directors supported the tender offer, making the acquisition a friendly takeover.
"Combining the strengths of Rovio and Sega presents an incredibly exciting future," Rovio CEO Alexandre Pelletier-Normand said in the same written announcement.
Sega Sammy shares, however, fell 4.2% on the day prior to the tender offer announcement but after it said it was considering acquiring Rovio, amid investor doubts about synergy prospects.
"'Angry Birds' is known everywhere in the world. But the brand is already past its peak," said Serkan Toto, founder of the Kantan Games consultancy.
"I think investors (in Sega Sammy) are disappointed by this use of €700m."
Based on Rovio's short-term earnings prospects, the offer was good for shareholders of the Finnish group even though it ascribed limited value to the company's pipeline of new games, Inderes analyst Atte Riikola said.
"There is considerable uncertainty at this point regarding the success of future games - all in all, I think the bid is good and Rovio's shareholders will be happy to accept it," he said.
Rovio received a €683m takeover bid in January from Israeli peer Playtika Holding, but the talks were called off last month.